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-2020-16/498 – Updated – measures in Bulgaria
|Country||Bulgaria , applies nationwide|
|Time period||Temporary, 13 April 2020 – 31 August 2021|
|Type||Legislations or other statutory regulations|
Measures to prevent social hardship
– Preventing over-indebtedness
|Author||Tsetomila Sabcheva and Luboslav Kostov (Citub), Eva Dimitrova|
|Measure added||12 April 2020 (updated 18 October 2021)|
The government approved capital increase of the state-owned Bulgarian Development Bank (BDB) by BGN 700 million (approx. €350 million; 0.6% of 2019 GDP). The bank can therefore provide BGN 200 million (approx. €100 million) for the issuance of portfolio guarantees to commercial banks that shall provide interest-free loans to citizens deprived of the opportunity to work due to the COVID-19 pandemic.
The measure targets short-term funding for individuals employed or self-employed in sectors that suffer economic loses due to the pandemic.
The measure aims to prevent social hardship and back up household (e.g. food, childcare, electricity) and other necessary expenses.
The measure is part of the country's economic measures to assist those affected by the coronavirus.
The interest-free loans of up to BGN 4,500 (approx. €2,250) guaranteed by the state are available to:
The main requirements for applicants for interest-free loan are:
As of 15 September 2020, 29,000 requests for interest-free credits have been submitted to partnering institutions from private persons since the programme's beginning. Some 17,907 requests for nearly BGN 75 million (€32,5 million) have been approved.
Partners of the programme are Allianz Bank, DSK Bank, Investbank, International Asset Bank, UBB, Municipal Bank, First Investment Bank, Postbank, Raiffeisenbank, D Commerce Bank, Central Cooperative Bank and UniCredit Bulbank.
BDB concluded guarantee agreements with the programming partners for nearly BGN 145 million (€73 million). The remaining funds will be available for the implementation of guarantee agreements until the end of the year, when it is the official deadline for applications.
By January 2021, more than 40,000 individuals have applied for interest-free loans, according to commercial banks, with just over 1,240 currently under consideration. The total value of the approved loans is over €55 million, and the average amount is €2,115.
|Applies to all workers||Does not apply to businesses||Does not apply to citizens|
Other social actors (e.g. NGOs)
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:
The measure was notified to the representatives of the social partners, but it was not discussed in detail with them.
Social partners agree that it is important to have the programme for interest-free credits during the pandemic, but hope for more grant funding for workers and citizens.
Eurofound (2020), COVID-19: Interest-free credit guarantee programme for individuals, measure BG-2020-16/498 (measures in Bulgaria), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/BG-2020-16_498.html
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