Background information

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.

Content of measure

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:

• credit facilities/working capital, short-term loans and loan rescheduling for enterprises and agricultural producers affected by the COVID-19 crisis;
• working capital, including loans to start-ups, guaranteed under COSME programme;
• credit lines;
• investment loans, including loans to start-ups, guaranteed under COSME programme;
• bridge loans for companies awarded grants under operational programmes.

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.

Use of measure

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.

Target groups

Workers	Businesses	Citizens
Employees in standard employment	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government	European Funds National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Unknown	Unknown
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: Unknown

Involvement

Unknown

Views and reactions

Unknown

Sources

• 31 December 2018: Micro financing institution JOBS (mfi.bg)
• 12 October 2022: National Guarantee Fund (www.ngf.bg)
• 12 October 2022: Annual Financial Statements of MFI JOBS for 2018 in Bulgarian (www.mfi.bg)
• 12 October 2022: Annual Financial Statements of MFI JOBS for 2017 in English (www.mfi.bg)
• 12 October 2022: Jobs offered 'help' with up to 10% interest (www.banker.bg)
• 13 October 2022: Bruggeman, F., de Lavergne, F. European Restructuring Toolbox. European Commission, 2010 (ec.europa.eu)