The Fund of Funds Relaxed Micro-Lending Requirements for Start-Ups and Social Enterprises

The modification comes as yet another step by the FoF to support business against the economic fallout of the COVID-19 pandemic


Microloans financed using funds from the Fund of Funds (FoF) will be available at even more relaxed terms. The purpose is to further enhance their accessibility for final recipients and facilitate the loan application process. The modification comes as yet another step by the FoF to support business against the economic fallout of the COVID-19 pandemic.

The public resources earmarked for micro-lending with shared risk amount to BGN 23.9 million and come from OP Human Resource Development 2014—2020 which is co-financed by the European Social Fund. The funds reach the enterprises via three financial intermediaries: SYS Credit, MicroFund and First Investment Bank (FIB). The FoF has already signed amending annexes to its agreements with all three, improving the loan terms.

The amending annexes expand the scope of borrowers and financing is now available to companies and self-employed that have registered no longer than 5 years ago. So far, the applicants were required to have a track record of less than 3 completed financial years.

The administrative requirements for proving the eligibility of costs financed with the loan under the financial instrument have also been relaxed.

In order to mitigate the consequences of COVID-19 for a period of nine months following the end of the emergency epidemic situation, the following, more favourable, terms are also provided:

–  an optional grace period of up to three years for the loan principal and/or interest payments;

–  a possibility to make small loans of up to BGN 5 000; 

–  a waiver on the requirement to the loan applicant for no previous profit distributions.

Microlending with shared risk supports the seeding and development of start-ups and social enterprises. The financing will also assist enterprises whose owners come from vulnerable groups such as people who have been unemployed for more than six months, people aged under 29, people with disabilities.

The loan size can be up to BGN 48 895 and the repayment period is up to 10 years. The loans are granted for the acquisition of tangible and non-tangible assets intended for developing and expanding business operations of the enterprise or of the self-employed person. They can also be used to cover other costs relating to the core business, including occupational training of workers or the entrepreneur.