News and Analysis

Public Funds Amounting to BGN 26.4 million Channelled to Start-Ups and Social Enterprises

The Fund of Funds selected an intermediary to implement the Shared-Risk Microlending financial instrument


The Fund of Funds (FoF) has selected a fund manager for the Shared-Risk Microlending financial instrument (FI). The financing has been provided under Operational Programme Human Resource Development 2014-2020 (OPHRD) which is co-financed by the European Structural and Investment Funds. The instrument operates a budget of BGN 26.4 million divided into nine lots, ranging between BGN 1 million and 6 million each, to be made available in micro loans.

Based on the evaluation, First Investment Bank AD was ranked first for all lots. The bank committed to match the public financing provided by the Fund of Funds by securing an additional BGN 8 492 000 in private financing. The FoF financing is provided at a zero interest rate; thus, the final recipients will be charged a weighted average interest on their loans, which is significantly more favourable than the market rate of similar products.

The purpose of the instrument is to support entrepreneurship (including social entrepreneurship) by offering loans, including to persons from certain vulnerable groups such as those unemployed for over 6 months, young people aged up to 29 and people with disabilities.

The Shared-Risk Microlending financial instrument will finance activities involving the acquisition of fixed and non-fixed assets; working capital needs of enterprises or self-employed persons for business development/expansion; development and upskilling of employees or the self-employed entrepreneur.

Micro loans will amount to up to BGN 48 895, with maturities of up to 10 years. The next step is to sign a contract with the selected financial intermediary, First Investment Bank AD.

This is the second financial instrument under the OPHRD to be launched by the Fund of Funds. As a result of the contracts awarded under the first public procurement procedure, BGN 3.4 million in public funds have been made available to start-ups and social enterprises since December 2017. So far, 82 projects have been financed.