Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure BG-2011-1/2510 – Updated – measures in Bulgaria
|Country||Bulgaria , applies nationwide|
|Time period||Open ended, started on 01 January 2011|
|Context||COVID-19, Restructuring Support Instruments|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Access to finance
|Author||Ekaterina Markova (IPS-Bas) and Eurofound|
|Measure added||23 June 2022 (updated 07 November 2022)|
As part of the National Guarantee Fund, which provides financial support under several schemes, its subsidiary, the Bulgarian Development Bank Microfinancing (previously known as Micro financing institution JOBS), supports micro and small enterprises, agricultural producers, freelancers, craftsmen, and start-ups.
The applicants (including their related parties) must have good credit history and must not have public liabilities (to the state budget, National Social Security Institute, and other institutions), and enforcement proceedings opened against the borrower and co-debtors.
Under Decision 309 of 3 May 2007, the Council of Ministers and the Law on Bulgarian Development Bank (promulgated SG 43 of 29 April 2008), the project managed by the Ministry of Labour and Social Policy (MLSP) 'Micro-credit Guarantee Fund' has been transferred to the National Guarantee Fund, administered by the Bulgarian Development Bank (BDB). Since 2010, the micro credit financing has been transferred to a BDB subsidiary - the Micro financing institution JOBS.
The Micro financing institution JOBS offers a variety of financial instruments for micro and small enterprises. In 2020, the institution expanded it offers to tackle consequences of COVID-19 crisis.
The current list of available support includes:
Loans are provided for investment, working capital and lease of land, machines, vehicles, industrial and other equipment.
BDB Microfinancing (JOBS Micro Financing Institution) provides financial support to companies affected by the COVID-19 pandemic in the form of loans for working capital and credit facilities. The target group is legal entities, farmers – natural persons registered as farmers, sole proprietors, and cooperatives cultivating agricultural land (own or leased). Eligible are existing and start-up companies in Bulgaria experiencing shortages of working capital due to force majeure circumstances related to the economic crisis caused by the COVID-19 pandemic.
The purpose of the instruments is to encourage affected micro enterprises and companies to continue their business and retain jobs. The instrument is offered in the form of credit facility or working capital loan in instalments, including payment of current operating costs; short-term loan to finance working capital shortages associated with the effects of the COVID-19 pandemic; rescheduling existing loans already covered by the EaSi guarantee provided by JOBS MFI.
The loan can amount to up to BGN 48,800 (€24,950) and can be denominated in both EUR and BGN, with a repayment period up to 60 months for credit facilities and up to 36 months for working capital loans, with provided grace period up to 24 months.
The maximum annual interest rate will be up to 10% and fee 0.5%. The collateral can be in the form of promissory note, co-debtorship, EaSi guarantee.
Jobs has offered finance support to companies specialising in installations for monitoring of smoke-free fires (DMTech), bags with built-in gramophone records (Kloshar), production of bio products like wine, tee and vegetable oil.
According to news from the NGF (2018), since its establishment in 2010, the JOBS MFI provided financing to 650 micro and small enterprises, amounting to BGN 32.2 million (€16.46 million).
According to the Annual Financial Statements 2018, in 2018 JOBS MFI concluded 36 financing agreements for about €1.53 million.
According to the Annual Report of the National Guarantee Fund (NGF), at 31 December 2012 the total credit portfolio included 1,813 micro credits at the total amount of BGN 16.697 million (€8,537,040).
According to the official data available from the MLSP, as of 15 October 2008 about 12,200 applications had been made. Of these, 10,361 were approved, leading to the creation of about 18,500 new jobs. The total value of loans provided is more than BGN 164 million (€84 million). These data relate to the period 2001 (when the project began) to 2008.
The BDB Microfinancing improves access to financing for companies with strong potential but short business histories, and therefore low collateral. It provides a more efficient loan process and more favourable lending conditions.
In 2020, business representatives argue that the interest rate of nearly 10% is too high for micro and small enterprises dealing with an economic crisis. Another critique is that the public institution has interest rates higher than the private banks, given the fact that some private banks are offering loans with rates between 5% and 6%. Many enterprises call for revision of the programme.
Since 2008 there have been no analyses showing any direct effect on job creation, or any other impact assessments.
Employees in standard employment
||Applies to all businesses||Does not apply to citizens|
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Not applicable||Not applicable|
Social partners' role in the implementation, monitoring and assessment phase:
Eurofound (2022), Micro-credit Guarantee Fund, measure BG-2011-1/2510 (measures in Bulgaria), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/BG-2011-1_2510.html
30 January 2023
Governments across the EU continue to implement policies to support citizens and businesses in the face of rising food and energy prices caused by the COVID-19 crisis and intensified by the war in Ukraine. This article summarises the policy responses as reported in Eurofound's EU PolicyWatch database from January to September 2022.Article
12 September 2022
Although the worldwide pandemic situation had already disrupted supply chains and triggered increases in energy and food prices in 2021, the situation deteriorated in 2022 with the Russian invasion of Ukraine.Article
12 September 2022
This article summarises the first policy responses that governments across the EU have started to implement to support companies affected by the rising prices, and those with commercial ties to Ukraine, Russia or Belarus.Article
Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.