Bulgaria: €102 million of EU funds to support SMEs
On 13 October 2015 the European Commission launched an Operational Programme worth € 102 million from the European Regional Development Fund to boost the competiveness of Bulgaria's small and medium-sized enterprises through increased access to finance.
Investments under this programme, in the form of bank guarantees, are expected to generate between €400 million and €600 million of fresh loans for SMEs, thanks to the leverage effect of private investment.
The Commission aims at incouraging member states to increase their use of financial instruments in the context of European Structural and Investment Funds in 2014-2020, in line with the objectives of President Juncker's Investment Plan for Europe.
Bulgaria is the third EU country after Spain and Malta to adopt such an investment programme.
Bulgarian SMEs should benefit from the first loans under this programme in early 2016. Such a programme could be easely adopted in Italy as well.
The SME Initiative is a joint financial instrument of the European Commission, the European Investment Bank and the European Investment Fund and it does not require co-financing from national or regional resources.
SMEs are the Bulgarian economy's backbone
Bulgaria’s economy is dominated by SMEs, which make up 76% of employment and 61% of value added in the country. Bulgaria is also among the countries reporting the largest share of SMEs indicating that access to finance is their greatest concern. The SME Initiative entails an innovative change in the use of EU funds, combining them with EU central budget (i.e. resources from the COSME and/or Horizon 2020 programmes) and EIB Group funds and guarantees.
The country will reallocate part of the EU funding earmarked for guarantee instruments under the "Innovations and Competitiveness" Operational Programme and channel it through the SME Initiative in the form of uncapped guarantees to banks and other financial institutions. These guarantees will then cover portfolios of loans extended to SMEs to take first risk in projects.