European Foundation
for the Improvement of
Living and Working Conditions

The tripartite EU agency providing knowledge to assist
in the development of better social, employment and
work-related policies

EU PolicyWatch

Database of national-level policy measures

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-2020-11/497 Updated – measures in Bulgaria

COVID-19: Credit guarantees to commercial banks by Bulgarian Development Bank (BDB)

КОВИД - 19: Портфейлни гаранции от ББР

Country Bulgaria , applies nationwide
Time period Temporary, 13 March 2020 – 31 December 2021
Context COVID-19
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Access to finance
Author Eva Dimitrova (for Eurofound), Luboslav Kostov (Citub)
Measure added 12 April 2020 (updated 26 May 2022)

Background information

The state-owned Bulgarian Development Bank (BDB) received BGN 700 million (approximately €350 million, 0.6% of 2019 GDP) capital increase, of which BGN 500 million (€250 million) shall be used for the issuance of portfolio guarantees to commercial banks for the extension of corporate loans.

The rest BGN 200 million (€100 million) are to back up bank loans for workers and self-employed.

Bulgarian Development Bank is a financial institution owned by the Bulgarian state. It was established in 1999 as the Encouragement Bank with main focus to support small and medium-sized enterprises.

Content of measure

The Bulgarian Development Bank will provide access to finance to support the turnover and activity of small and medium-sized enterprises affected by the COVID-19 pandemic. The aim is to minimise the risks of liquidity crisis and preventive business support, including through risk sharing with commercial banks in the country.

BDB will create a portfolio guarantee scheme worth BGN 500 million (€250 million), which will be able to guarantee loan portfolios for about BGN 2.5 billion (€1.25 billion) at commercial banks. This will provide an instrument for banks to support on the most affected businesses in the crisis: companies in the trade, services, including transport, tourism, hospitality, restaurant, logistics and export companies.

Under this support programme, BDB guarantees loans of up to BGN 300,000 (€150,000) to small and medium-sized enterprises, which are suffering negative consequences of the pandemic. Loans are granted by partner banks with reduced collateral requirements and the possibility of a grace period of up to 3 years.

All companies can apply for the measure, as long as they meet the individual conditions that each commercial bank requires. The conditions are strictly individual and may vary for each company according to the financial position and debt of that company.


The following updates to this measure have been made after it came into effect.

06 February 2022

The term for inclusion of loans in the guaranteed portfolio is extended until 30 June 2022. All six BDB's partner banks are already working on the updated terms of the "Recovery Programme" which start accepting requests for financing in February 2022.

05 August 2021

The extension of the measure to 31 July 2021 is in connection with a decision of the caretaker government, in particular the caretaker Minister of Economy.

20 July 2021

The final date to add loans to the guaranteed portfolio is extended up to 31 December 2021. Accordingly firms can apply for funding under the program till 20 December 2021.

30 June 2021

As of 10 May 2021 under the Program for Enterprises, at the request of commercial banks - partners BDB AD has confirmed for guarantee transactions for BGN 235,374,534.

20 January 2021

After the introduction of the new parameters, which the European Commission approved at the end of November in the work of commercial banks, BDB now guarantees loans of up to €0.5 million for small and medium enterprises and up to €1 million for large companies, which suffer negative consequences from the pandemic.

The loans are granted by nine partner banks, with reduced collateral requirements, a reduction in the interest rate and the possibility for a grace period of up to three years.

29 October 2020

Due to the deepening economic crisis the BDB is expanding its credit programme. Since the fourth quarter of 2020, the bank will also be able to back up credits for companies with more than 250 employees. Therefore, the amount of a credit that the bank will be able to support increases to a limit of BGN 2 million (€1 million) for big companies and up to BGN 1 million (€500,000) for SMEs.

Application period has been extended to 23 June 2021.

28 July 2020

About BGN 200 million (€100 million) of the resources provided by the government to the Bulgarian Development Bank (BDB) for credit guarantees to companies has been redirected to the programmes offering grants to micro, small and medium-sized companies.

Use of measure

In July 2020, it was announced that the BDB has only deployed BGN 9 million (€4.5 million) as portfolio guarantees to commercial banks for support and extension of corporate loans.

As of November 2020, 929 companies have received bank loans under the business support guarantee of BBD. The total amount of supported credits for business is of about BGN 113 million (€55 million).

Together with the credit guarantees for individuals, the BDB has guaranteed loans in total worth of about BGN 213 million (€105 million).

Оnly 1% of all Bulgarian companies have been backed up by the credit guarantee support. Another 4% are analysing their benefits with the scheme. Around 27% of the surveyed companies say they are not able to profit from the measure.

As the measure has not be proven to be very successful in the beginning of the pandemic, some part of the money has been redirected to SMEs grant measures in July 2020. However, the interest for the measure is increasing over time and the total sum of supported credits rises.

As of 20 January 2021 the value of the confirmed loans for small and medium-sized companies is a little over €79 million. The most serious is the interest from the sectors of trade and tourism, production and transport. Among the supported are also companies in the field of construction, agriculture, services and advertising.

Target groups

Workers Businesses Citizens
Does not apply to workers Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
Company / Companies
Other social actors (e.g. NGOs)
National funds

Social partners

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

Trade unions Employers' organisations
Role No involvement as case not in social partner domain No involvement as case not in social partner domain
Form Not applicable Not applicable

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

  • Only employers' organisations
  • Main level of involvement: Peak or cross-sectoral level


The Bulgarian Industrial Association (BIA) is analysing the demand for business credits. BIA representatives together with representatives of the Ministry of Economy, Bulgarian Development Bank and other representatives of employers' organisations have discussed the BDB measures during an online meeting in November 2020.

Views and reactions

The social partners were not involved in any way in the preparation of the measure. It was the sole decision of the government in the context of measures that applied to all other economies.

As of November 2020, The Bulgarian Industrial Association (BIA) is carrying out an online survey among Bulgarian business on the COVID-19 policies and support programmes and their efficiency. Official results and statements will be published in mid December 2020.


  • 26 March 2020: Прекият ефект от правителствените мерки през банката се оценява на над 2% от БВ (
  • 06 April 2020: ЗИД на ЗДБРБ (
  • 16 April 2020: Министерство на финансите на Република България (
  • 28 July 2020: About BGN 200 million of BDB's money will be redirected to grants for companies (
  • 29 October 2020: The scope of the BDB guarantee program in support of business is expanding (
  • 10 November 2020: Loans for over BGN 213 million have been approved by BDB under its guarantee programmes. © (
  • 13 November 2020: Only 1% of companies are interested in anti-crisis measures (
  • 20 January 2021: ББР одобри кредити за над 268 млн. лв. по двете антикризисни програм (
  • 06 February 2022: Recovery Program (


Eurofound (2020), COVID-19: Credit guarantees to commercial banks by Bulgarian Development Bank (BDB), measure BG-2020-11/497 (measures in Bulgaria), EU PolicyWatch, Dublin,


Eurofound publications based on EU PolicyWatch

30 January 2023


Measures to lessen the impact of the inflation and energy crisis on citizens

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.


12 September 2022


First responses to cushion the impact of inflation on citizens

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.


12 September 2022


Policies to support EU companies affected by the war in Ukraine

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.


5 July 2022


Policies to support refugees from Ukraine

This article summarises the first policy responses of EU Member States, including those of the social partners and other civil society actors, enabling refugees to exercise their rights under the Temporary Protection Directive.


Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.