Bulgaria's PM Vows BGN 1 B in Loans for SMEs

Small companies will gain access to loans of BGN 1 B from the Bulgarian Development Bank, BBR, according to Prime Minister Plamen Oresharski.

Oresharski announced the measure in the lobby of the Parliament shortly before his departure to Brussels, where he is to attend a meeting of the European Council on Thursday and Friday.

Oresharski, as cited by money.bg, explained that BBR could attract resources, lines of credit, without needing to increase its capital.

Under the initial scenario, the government envisaged a capitalization to BGN 1 B of BBR, but the measure was rejected.

Oresharski suggested Thursday that the resources would be allocated to small companies because big and medium-sized firms in Bulgaria enjoyed easier access to financing.

BBR offered new direct loans of over BGN 330 M to small and medium sized companies in 2011 and 2012.

The loan portfolio of the BBR grew by over 50% to BGN 608 M in the period 2010 – end-2012.

During the same period, the bank allocated BGN 130 M in lines of credit to partner banks for financing projects of small and medium-sized companies under attractive terms and over 90% of the resources under the scheme have already been absorbed.

By June 27, 2013, BBR has granted 448 direct loans to micro-, small and medium-sized enterprises, the average loan size being BGN 1.2 M, compared to 225 loans and an average loan size of BGN 1.8 M in end-2010.

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