The Fund of Funds launched a selection of financial intermediaries to make loans in rural areas
The total amount of lending under the financial instrument is expected to exceed BGN 60 million
The Fund of Funds (FoF) launched a procedure for the selection of financial intermediaries that will manage the financial instrument for lending in rural areas. The resources are made available by the Rural Development Programme 2014—2020 co-financed by the European Agricultural Fund for Rural Development.
The financial instrument has a budget of BGN 38.3 million allocated among 3 lots. Prospective financial intermediaries are expected to top up the public resources with private capital, bringing the total loanable funds to over BGN 60 million. Once the selection procedure for intermediary firms is completed, low-interest loans will be available to agricultural producers and other businesses in rural areas.
Farmers will be able to borrow up to BGN 2 million, and access to loans under more favourable terms will be open also to enterprises involved in non-agricultural business activities in rural areas, including manufacturing, trade, handicrafts, any type of services such as accounting, utility, repairs, veterinary, IT, care for the elderly. The money can be used both for investment and for working capital.
The Fund of Funds will co-finance two types of low-interest loans: top-up of project grants already awarded (with the FoF participating at up to 50 % of the loan amount) or stand-alone loans ((with the FoF participating at up to 70 % of the loan amount).
Preferential terms will include below-market interest rates, relaxed application requirements, lower surety requirements, longer grace periods, enhanced access to financing for specific target groups (small farm holdings, young farmers). The allocated funds are expected to provide support to at least 130 entities doing business in agriculture or in processing agricultural produce, and to non-agricultural businesses operating in rural areas.
The application deadline is 22 March 2021 (close of business) and interested parties can access the relevant documentation and learn more about how to apply at https://app.eop.bg/today/103729