The Fund of Funds Signed a Rural Lending Agreement with Fibank
The total amount of lending under the financial instrument is expected to exceed BGN 70 million.
The Fund of Funds signed an agreement with First Investment Bank (Fibank) for the management of the financial instrument “Financing in Rural Areas”. The signing ceremony was held at the Ministry of Agriculture, Food and Forestry in the presence of Deputy Minister Georgi Sabev, who heads the RDP Managing Authority, and representatives of the two financial institutions: Nikola Bakalov, Fibank CEO and Management Board Chair, and Martin Gikov, CEO and Chair of the Board of Directors of the Fund of Funds, Nadia Koshinska, Management Board Member and Head of Fibank’s SME Banking Directorate, Kamen Slavov, Member of the Board of Directors of the Fund of Funds.
The public resource for the instrument is provided under the Rural Development Programme 2014-2020 (RDP) within the European Agricultural Fund for Rural Development, in the amount of BGN 38 million. The financial institution selected by the Fund of Funds is expected to match the public resources with an equal amount of private capital, bringing the total loanable funds to over BGN 70 million.
The instrument is targeted at farmers and small and medium enterprises operating in rural areas and will offer financing under the facility until 31 December 2023.
Loans will be provided for agricultural and non-agricultural operations in rural areas to improve competitiveness in the agri sector and promote social inclusion and support for the sustainable development of agricultural holdings.
The instrument will cover both new stand-alone investments, and top-up loans to co-finance projects supported by grants. Co-financing with be provided under the following terms:
- Low-interest EUR and BGN investment and working capital loans under preferential terms that leverage the investment and are linked to it;
- Investment loans of up to BGN 2 million. Additional working capital financing up to 30% of the total investment amount for the respective final recipient, or BGN 391 166 in working capital lending, whichever is higher, in compliance with the requirements and ceilings applicable to State aid;
- Maturity of up to 10 years;
- Low interest financing, with no interest or management fees charged on RDP funding;
- Low level of own funding required from the final recipient
The next step, following the signing, is the structuring of the product under the “Financing in Rural Areas” by First Investment Bank and its launch for active offering on the market to the final recipients.