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COVID-19 EU PolicyWatch

Database of national-level responses

Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case BG-2020-20/1006 Updated – measures in Bulgaria

Grant support for micro and small enterprises

Безвъзмездна подкрепа за микро и малки предприятия

Country Bulgaria , applies nationwide
Time period Open ended, started on 12 May 2020
Type Legislations or other statutory regulations
Category Ensuring business continuity and support for essential services
– Mobilisation of a larger workforce
Author Tsetomila Sabcheva and Luboslav Kostov (Citub) and Eurofound
Case created 17 July 2020 (updated 25 January 2021)

Background information

The government approved a grant programme for micro and small enterprises with a total budget of BGN 173 million (€86 million). The aid for this category varies starts from BGN 3,000 (€1,500) for micro and goes up to BGN 10,000 (€5,000) for small enterprises.

Eligibility criteria cover costs needed to overcome the shortage of funds or lack of liquidity resulting from the COVID-19 epidemic, as follows:

  • expenses for purchase of raw materials and consumables;
  • expenses for external services (including overheads);
  • staff costs (including remuneration costs and costs for social security and health contributions at the expense of the employer).

Content of measure

The measure is aimed at micro and small enterprises with a staff of up to 50 employees registered before 1 July 2019, from all economic sectors (except those falling within the scope of the Rural Development Programme), which registered a decrease of at least 20% in turnover for April 2020 compared to the monthly arithmetic average in 2019, with a minimum turnover of candidates for 2019 of BGN 30,000 (€15,338).

The measure includes:

  1. 100% grant support with a minimum aid amount of BGN 3,000 (€1,533) and a maximum of BGN 10,000 (€5,112).
  2. The grant requested by the applicant may not exceed 10% of the turnover for 2019.

The projects will be submitted and evaluated electronically through the Information System for Management and Monitoring of EU Funds in Bulgaria (UMIS 2020). The procedure is open for application.

Updates

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

06 November 2020

In autumn 2020, the programme has received additional funding of BGN 52 million (€26 million) under the anti-crisis measures implemented by the Ministry of Economy.

Use of measure

The purpose of the measure is to support employment in micro, small and medium-sized enterprises, as well as to help enterprises themselves to avoid bankruptcy. In Bulgaria, over 90% of enterprises are within this category, which makes this measure of structural importance for the whole state of the economy.

The total grants paid so far to Bulgarian companies amount to €22,190,000.

As of 7 August 2020, a total of 7 388 project proposals have been approved for funding under the procedure, for which the value of the provided grant amounts to €31,530,000. The total number of submitted project proposals under the procedure is 27,623 so far.

As of 18 December 2020, 21,190 project proposals submitted within 28 evaluation sessions were approved for funding, for which the value of the provided grant is in the amount of about BGN 173 million;

Additionally, by Order of the Head of the Managing Authority (RWM) of OPIC, a working group was formed, which reviewed all rejected project proposals (over 6,000) and identified the projects submitted by eligible applicants, according to the conditions for application and implementation, but rejected due to non-submission in time or non-submission according to the requirements of the additionally required documents. The work of the working group has ended with a total of 3,354 project proposals to be re-evaluated under the procedure.

In order to complete the evaluation faster and publish the final results in a timely manner, the procedure will be carried out according to simplified internal rules. An additional revaluation is forthcoming in the coming months.

Target groups

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

Actors and funding

Actors Funding
National government
Company / Companies
European Funds
National funds

Social partners

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

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

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

  • Unknown
  • Main level of involvement: Sectoral or branch level

Involvement

The social partners were not involved in the preparation of the measure, but all unanimously supported it and identified it as extremely important. The social partners assisted the executive in facilitating the implementation of the measure. The main dialogue was conducted with business representatives as direct beneficiaries of the grants. The unions had a consultative role.

Views and reactions

The unions had a consultative role, but fully supported the measure. The unions believe that this is an effective measure to maintain employment in small and medium-sized enterprises, as well as to increase their current turnover. Many of them were forced to lay off many people. To a large extent, the increase in unemployment in Bulgaria comes precisely from this type of companies, which do not have much capital and cannot afford to make a normal or negative profit for several months in a row.

Some associations such as Bulgarian Association of Consultants for European Programs (BACEP) and Bulgarian Industrial Association expressed the opinion that some steps and requirement in the application process might be too complex or inconvenient for micro and small business (e.g. requirements for electronic signature or too long and complicated contracts). They proposed working meetings with representatives in the government.

Sources

  • 12 May 2020: BG16RFOP002-2.073 „Подкрепа на микро и малки предприятия за преодоляване на икономическите последствия от пандемията COVID-19 (opic.bg)
  • 24 July 2020: COVID grants for small businesses will cost them gold (www.segabg.com)
  • 06 November 2020: More than BGN 400 million from the anti-crisis package are already with companies and citizens (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 (mi.government.bg)

Citation

Eurofound (2020), Grant support for micro and small enterprises, case BG-2020-20/1006 (measures in Bulgaria), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

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