Risk-sharing Micro-Finance facility

Through the financial instrument Risk-sharing Micro-Finance facility, the FMFIB will provide financing from Operational Programme Human Resource Development 2014-2020 (OPHRD) to financial intermediaries in the amount of around BGN 50 million, enabling the provision of new eligible micro-loans in support of the development of start-up enterprises, including those owned by individuals from certain vulnerable groups, and social enterprises.

Intermediaries are required to match the public resources made available with additional co-financing of at least 20% or 30% on a loan level, depending on the type of final recipient, and the overall size of the loan portfolio is expected to reach BGN 62 million as a minimum.

The FMFIB and the financial intermediaries share the risk of non-repayment by final recipients pari passu and in an amount up to the portion of the financing made available from the FMFIB resources in each micro-loan.

The FMFIB will select financial intermediaries which would secure the required private co-financing and on-lend the resources in the form of micro-loans to the target groups of final recipients. The transparent and non-discriminatory selection of financial intermediaries will be ensured by implementing the procedures laid out in the Public Procurement Act.

As part of the procedure for the selection of financial intermediaries and as required by Article 44 of the Public Procurement Act, the FMFIB held market consultations with prospective financial intermediaries to test the indicative technical specifications of the instrument, with the aim to arrive at an optimal structure for the financing instrument, taking into account the current market demands, the requirements of the prospective financial intermediaries, the goals set by the operational programme making the financing available, and the policies of  the FMFIB.

The market test outcomes have been summarized in the Market Test Report (attached in the bulgarian version) and reflected in the final version of the technical specifications and documentation which will be published when the call for selection of financial intermediaries is announced in compliance with the Public Procurement Act.