11.10.2021 BDB Microfinancing will lend to social entrepreneurs and start-ups
A new product in BDB Group’s portfolio will support representatives of vulnerable groups who want to start their own business. The company will lend to businesses and self-employed people, including unemployed people, young people and people with disabilities. The product is also aimed at supporting social enterprises (the so-called mission-driven businesses).
BDB Microfinancing, a subsidiary of the Bulgarian Development Bank, has signed a guarantee agreement for the use of a portfolio guarantee with a loss ceiling for microfinance with Fund Manager of Financial Instruments in Bulgaria EAD (the Fund of Funds). The resource is under the Human Resources Development Operational Programme 2014-2020 (HRD OP 2014-2020), co-financed by the European Social Fund.
The programme will enable SMEs in Bulgaria (start-ups and growing businesses) to benefit from an investment or working capital loan of up to EUR 50,000 (BGN 97,791) on concessional terms and at 25% lower interest rates compared to the standard terms provided by the financial institution.
The repayment period is longer, compared to similar products on the financial market.
The guarantee resource under the BDB Microfinancing program is BGN 1 million and the loans provided to final recipients are expected to reach BGN 5 million.
This support aims at improving access to funding for start-ups and social businesses, as well as supporting social entrepreneurship in the acquisition of tangible and intangible assets to develop or expand their activities.
One of the most important goods created by these companies is social capital – solving social problems, creating jobs, while also generating income for the entrepreneur. Social enterprises develop and implement innovations that stimulate social and economic development, offer new goods and public services and change stereotypes in market and non-market environments. BDB Microfinancing's new product has been designed for this specific segment of the Bulgarian economy, which usually remains out of sight of commercial banks and general measures and programs.