European Investment Fund, UBB and the European Commission extend cooperation to unlock EUR 768 million for Bulgarian MSMEs
02 October 2020
- EIF and UBB Bank extend existing COSME guarantees to unlock fresh EUR 400 million of loans and leases for Bulgarian MSMEs
- With the extension, the total amount of the EIF/COSME-guaranteed loans at the UBB is now EUR €768 million
- The agreement introduces two new specific guarantee envelopes under the COSME programme in Bulgaria – COSME Digitalization Pilot and COSME Covid-19
- The EIF is part of the European Investment Bank Group
Micro, small and medium-sized enterprises (MSMEs) in Bulgaria will have the opportunity to finance their growth and business development plans, digital transformation and post-COVID-19 recovery through loans with more flexible terms, as the European Investment Fund (EIF) and United Bulgarian Bank (UBB) have agreed to more than double the existing guarantee agreement to cover new UBB MSME loans for €400 million.
The loan guarantees are provided by the Competitiveness of Small and Medium-sized Enterprises (COSME) programme, launched by the European Commission to improve access to finance for SMEs.
The agreement brings the total amount of COSME-guaranteed loans available to MSMEs financed by UBB to €768 million (BGN 1.5 billion). It also introduces two new guarantee initiatives under the COSME Loan Guarantee Facility in Bulgaria: COSME COVID-19 and COSME Digitalisation, designed to help SMEs recover from COVID-19 and digitalise their business operations.
Bulgarian SMEs will be able to apply and benefit from COSME-guaranteed loans with UBB until 30 September 2023.
Lilyana Pavlova, Vice-President of the European Investment Bank, said: “The agreement between the EIF and UBB, guaranteed by the European Commission, brings a fresh €400 million in more affordable financing to Bulgarian MSMEs. These funds will help MSMEs finance development and growth plans, preserve jobs and digitalise their businesses. Together with our EU and UBB partners we have unlocked new opportunities for faster economic and social development in Bulgaria and faster recovery from COVID-19.”
Thierry Breton, European Commissioner for Internal Market, added: “Through the coronavirus support under the COSME Loan Guarantee Facility, the Commission and the EIF have made immediate liquidity available to micro, small and medium-sized enterprises. During this very challenging time for many companies, especially small ones, we are fully mobilised to help Bulgarian companies digitalise their business operations and get swift access to finance for their recovery.”
Peter Andronov, Chief Executive Director of UBB and Country Manager of KBC Group in Bulgaria, said: “Up to this point, UBB has provided financing for more than 4 000 transactions under the COSME programme, with a total amount of more than BGN 800 million. The new annex, which enables the bank to create a total portfolio of more than BGN 1.5 billion under the COSME programme – including these two new guarantee envelopes – is a natural continuation of the successful cooperation between UBB and the EIF in support of the development, capacity advancement and betterment of the processes of SMEs in Bulgaria.”
UBB was the first bank in Bulgaria to offer financial products guaranteed by the COSME Digitalisation Pilot and COSME COVID-19 Support Measures, both additional financing under the COSME programme launched by the European Commission and implemented by the EIF. The COSME Digitalisation Pilot supports the digitalisation of SMEs in Europe by guaranteeing 70% of eligible loans provided by banks, while the COSME COVID-19 Support Measures provide guarantees for 80% of loans for recovery from the COVID-19 pandemic.
Under the COSME COVID-19 guarantee programme, UBB plans to support Bulgarian SMEs with loans worth €125 million (BGN 245 million).
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 enterprises by helping them to access finance. It designs and implements venture and growth capital operations, as well as guarantee and microfinance instruments specifically targeting this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment.
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