The agreement with the European Investment Fund (EIF) will give ProCredit Bank the opportunity to provide documentary finance to small and medium-sized enterprises at more favourable conditions.
Following the new agreement, ProCredit Bank will finance Bulgarian enterprises with documentary credit lines such as letters of credit, payment guarantees, advance payment guarantees, performance bonds and other types. The total credit portfolio of ProCredit Bank under this instrument is expected to reach EUR 25 million. ProCredit clients will have access to new credit products at more flexible and longer terms. The EIF guarantee will cover 50% of the credit risk in each transaction.
The Bulgarian Ministry of Economy and the EIF have decided to launch this pilot guarantee product under the Joint European Resources for Micro to Medium Enterprises (JEREMIE) initiative in Bulgaria. The new instrument will address financing needs not covered by the other guarantee facilities on the Bulgarian credit market.
Rumyana Todorova, Member of the Management Board and Executive Director of ProCredit Bank (Bulgaria) stated: “Today’s signing sends a strong positive signal to the business community in Bulgaria. This attractive guarantee facility will allow small and medium-sized enterprises to upgrade and expand their operations. ProCredit Bank is a major partner in programmes financed by European institutions, as the bank has granted over 4,700 loans to small and medium-sized enterprises for over EUR 450 million. The great number of companies that obtained financing under the programmes and the maintained high quality of the loan portfolio show the significant role of ProCredit Bank in the support of the development of the Bulgarian economy.”
JEREMIE (Joint European Resources for Micro to Medium Enterprises) is a joint initiative launched by the European Commission (Directorate General Regional Policy) and the European Investment Bank group to improve access to finance for SMEs in the EU within the Structural Funds framework for the period 2007 - 2013. JEREMIE enables the EU Member States and Regions to put money from the structural funds and also national resources into holding funds that can finance SMEs in a flexible and innovative way.
The JEREMIE Initiative in Bulgaria has so far financed close to 10,000 small businesses in Bulgaria with loans and equity investments of approx. EUR 900 million. Reflows from these operations are currently reinvested in new guarantee and equity instruments.
About the EIF
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized businesses by helping them to access finance. The EIF designs and develops both venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment.
About ProCredit Bank (Bulgaria) EAD
ProCredit Bank (Bulgaria) EAD was founded in October 2001 by an alliance of international development-oriented investors. Today, the bank’s sole owner is ProCredit Holding, based in Frankfurt am Main (Germany). ProCredit Holding is the parent company of the development-oriented ProCredit Group, which consists of commercial banks for small and medium enterprises (SMEs) and whose main operational focus is on South Eastern and Eastern Europe. The primary remit of ProCredit Bank EAD is to support the development of SMEs and to foster a favourable environment for the growth of the Bulgarian economy.