The Fund issues guarantees that supplement the collateral required by commercial banks for credit to the Bulgarian business.
The Fund issues guarantees that supplement the collateral required by commercial banks for credit. NGF facilitates access to finance for SMEs and helps reduce interest rates on loans. NGF support is indirect, through risk sharing schemes with funding institutions. The specific objectives are:
1. raising the interest and creating conditions for introducing effective measures for improving the state of the farmers,
2. Accelerating the implementation of investments under the RDP (2014-2020) and the full achievement of the objectives of the program by increasing the access of SMEs to credit resources,
3. supporting the competitiveness and overall improvement of the business climate in the country.
4. Provide access to funding for beneficiaries of RDPs that do not meet the standard requirements for commercial bank credit - with the support of the Fund, it is provided the possibility of crediting start-ups and non-credit history enterprises.
5. to create acceptable and attractive conditions for financing projects under the RDP
6. to achieve a discount on the interest rates on loans for beneficiaries under the RDP from the average interest rates on the newly opened loans market
The guarantee covers 50% of the loan amount. Eligible credits are investment, working capital and limits guaranteeing bank guarantees for an advance payment under a project - up to a maximum of BGN 3 million. The validity of the guarantee is until 31.07.2021.
Human resources are 8 employees of NGF
The program budget is 50 million leva (BGN)
Evidence of success
Under the guarantee scheme, the NGF supported 96 SMEs, 114 guarantees were issued to the amount of BGN 42 million, for loans amounting to BGN 85 million.
The main difficulties are:
- insufficient awareness of beneficiaries in smaller settlements
- banks in Bulgaria still have restrictive policies and continue to require significant collateral for lending
Potential for learning or transfer
Simillar public or private initiative can be created in countries/regions that don't have an institution or fund that issues guarantees that supplement the collateral required by commercial banks for credit to the business.
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