The Fund of Funds Mobilised BGN 400 million in Response to the Economic Consequences of the Crisis


The Fund of Funds is actively working on coming up with feasible measures to address the economic consequences of the unprecedented public health crisis. The main role of the Fund is to implement financial instruments in Bulgaria via facilities using EU funds and private resources.

The financial instruments financed from the European Structural and Investment Funds (ESIFs) are specialised funding schemes where the Fund of Funds provides financing, via financial intermediaries and banks, in the form of guarantees, loans and equity investments to various target groups of final recipients

Combining public and private resources and initiative, those instruments are becoming even more meaningful tools, in a situation where the state is trying to meet a huge number of major challenges while reallocating our common scarce resources. In the current exceptional circumstances, we are focusing our efforts on three main areas which we believe will have a strong positive impact and support a rapid recovery of the economy.


Firstly, we are designing a brand-new guarantee product, to provide liquidity support to small and medium-sized enterprises operating in various sectors, including those most affected by the crisis, such as tourism, transport, wholesale and retail trade, etc.

The Fund of Funds will provide banks with guarantees totalling BGN 170 million that will back up a fresh loan portfolio of up to BGN 850 million this year.

These will serve to source mainly working capital in the form of long-term loans of up to 10 years, as a temporary measure to help businesses in the current period of economic uncertainty and an acute contraction of their operations.

Our goal is to enable such lending without any additional administrative burden for the loan applicants, under the smoothest possible conditions. The possibility for loans to be offered interest-free to businesses that retain their staffing levels from before the crisis is also being considered.

In addition, an extended grace period for the principal amounts is envisaged, and the possibility to grant the option of a grace period for any interest falling due while the crisis lasts is also being discussed with the responsible institutions.


Secondly, theFund of Funds runs a programme already underway which provides support to self-employed individuals and small start-ups having a very short business track record, if any, including those set up by vulnerable groups (people with disabilities, young people aged 29 or less, people who have been unemployed for more than 6 months).

This is a facility for granting concessional loans, including without any collateral, to target groups of final recipients who usually have no access to bank financing due to a lack of credit history. The aim of the instrument is to retain employment levels by supporting small businesses, including those run by self-employed persons.

Currently, the amount available for this measure totals BGN 24 million, with the possibility of supplying additional funds, should the facility be exhausted rapidly. The instrument is up and running and the loans are extended via our financial intermediaries that have capacity and branch networks in all of the 28 districts of Bulgaria.

Eligible undertakings could receive up to BGN 50 000 leva in working capital loans funds and investments under more favourable conditions and at interest terms below market rates.

With respect to this instrument, we are currently in negotiations with the Ministry of Labour and Social Policy, which is the ministry responsible, and our aim is to reach agreement on simplified application terms, a broader range of eligible companies, as well as the possibility to offer interest-free loans.


Thirdly, we are working to increase the flexibility of our other facilities that are already on the market.

The facility in the field of venture equity investments in start-ups and innovative businesses, which is already available on the market, amounts to BGN 150 million. This instrument is designed to support companies that have the potential to contribute in the rapid economic recovery after the crisis, especially in key areas of innovation and digitalisation, as well as make investments in high tech such as bio and nanotechnology, mechatronics, green technology and IT, pharmaceuticals, fintech, where such investments can bring added value. Considering that start-ups and fast-growing companies are facing so far unpredictable challenges, the Fund of Funds is focusing its efforts mainly on accelerating investments and providing more favourable conditions.


In addition, the Fund of Funds will continue to finance municipal and other projects aimed at improving the urban environment, with a facility amounting to BGN 418 million available through its urban development funds. This support to Bulgarian municipalities for infrastructure projects, sports facilities, cultural and tourist sites, development of economic zones is key for the economy in times of crisis, given the lack of financing alternatives on the market. We are exploring the option to broaden the scope of this instrument to enable working capital financing, including for sectors most affected by the crisis, such as tourism and transport.


About the Fund of Funds:

The core business of the Fund of Funds is to structure and manage financial instruments co-financed from the European Structural and Investment Funds during the programming period 2014-2020. The company manages public resources in excess of EUR 660 million and places on the Bulgarian market a wide range of products for the financial sector, including guarantees, private equity funds and a range of other instruments.


*For more information, please visit the company’s website at