The European Commission adopted today 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.
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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.
This programme is part of a broader initiative of the Commission to encourage Member States to double 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.
Corina Cre?u Commissioner for Regional Policy, said: “I want to congratulate the Bulgarian authorities on signing up to the SME initiative; Bulgaria is now in the leading group of EU countries benefiting from this innovating tool. Small businesses are the engines of growth and job creation in Europe. For the prosperity of the EU economy, improving their access to finance is crucial, as it is the lifeblood of entrepreneurship.”
Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “The SME initiative adopted today in Bulgaria will give a boost to start-ups and small businesses from Sofia to Varna and everywhere in between. We want Member States to use EU funds in new and creative ways, and this is exactly what Bulgaria is doing. Following Spain, Malta and Bulgaria, we want more Member States to join.”
Vice-President Kristalina Georgieva, responsible for Budget & Human Resources said: “This 200 million BGN from the European budget will go for bank guarantees, so that SMEs in Bulgaria have access to attractive loans of up to 1.2 billion BGN. The money will help them develop their business, access new markets, create more jobs. I invite them to be active and make use of the EU financing to achieve better lives for themselves and for the people around them.”
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.
The SME Initiative is a joint financial instrument of the European Commission, the European Investment Bank and the European Investment Fund and does not require co-financing from national or regional resources.
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.
Building on Bulgaria’s success with the JEREMIE financial instrument for the 2007-2013 programming period, 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. It will result in better loan conditions for Bulgarian SMEs and in a higher leverage effect than if the funds were given as traditional grants.
Source: European Commission
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