Background information

The JOBS microfinance institution, part of the Bulgarian Development Bank Group, has announced a microbusiness loan with 10% interest for companies affected by the COVID-19 pandemic. It allows young companies to be able to finance themselves with a working loan to retain staff if there are other reasons not to take advantage of the 60:40 measure.

The bank considers a possibility to make the credits interest-free over the period of the coronavirus crisis.

The portfolio guarantee applied by the Fund may also be used after the end of the period of emergency and, according to the Fund, is a suitable product for financial recovery at a time when banks would again be uncertain about lending to the business.

Content of measure

The Fund of the Bulgarian Development Bank will provide banks with guarantees worth of BGN 170 million (approx. €85 million), and expects them to provide loans of up to BGN 850 million (€425 million), mainly for small and medium-sized enterprises, in the next one year. The Microcredit Fund tool is aimed at small companies - the so-called micro-enterprises, as well as companies that have just started their business (to have up to three years of business history at the moment, with possible expansion - up to five years).

The idea is to enable banks to support this vulnerable group of start-ups that may have started a small family business with loans up to BGN 50,000 (€25,000). This will support their investment plans for the crisis and working capital so that they can continue their operations.

This tool is aimed at a target group of recipients who generally do not have easy access or have no access to bank financing at all - companies with no credit history.

Use of measure

As of 17 December 2020, financial agreements have been signed with 8 banks with a total amount of portfolio guarantees of BGN 649,000,000. The loans confirmed by BDB for financing as of 18 December 2020 are over 1,220 with a total amount of BGN 152,089,070.

The progress of the program for the last 14 days has been submitted by the commercial banks new data shows nearly 160 loans approved for financing, for over BGN 15,000,000.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	One person or microenterprises Start-ups	Does not apply to citizens

Actors and funding

Actors	Funding
National government Company / Companies	Companies National funds

Social partners

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

	Trade unions	Employers' organisations
Role	Unknown	Consulted
Form	Not applicable	Consultation through tripartite or bipartite social dialogue bodies

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

• Unknown
• Main level of involvement: Unknown

Involvement

n/a

Views and reactions

Employers' organisations actively participated in the debate on supporting small and medium-sized businesses.

Sources

• 06 April 2020: ББР стартира нови програми в подкрепа на бизнеса, засегнат от COVID-19 (www.ngf.bg)
• 24 April 2020: BDB's new microbusiness loan is 10% interest (www.banker.bg)
• 18 December 2020: Напредък по антикризисните икономически мерки изпълнявани от Министерството на икономиката за преодоляване на негативните ефекти от пандемията върху българската икономик (coronavirus.bg)
• 12 January 2021: BBB approved loans for over BGN 268 million under both anti-crisis programs (coronavirus.bg)