The Fund of Funds (FoF), the Bulgarian Development Bank's subsidiary BDB Microfinance and the Municipal Guarantee Fund for Small and Medium Enterprises (MGFSME) of Sofia Municipality have signed a Memorandum of Cooperation aimed at stimulating the development of social enterprises and start-ups.

As a follow-up step based on the Tripartite Agreement, it is expected that the scope of the FoF Guarantee Facility and the opportunities for support offered by the BDB Microfinance to social enterprises and start-ups will be expanded through the issuance of individual guarantees by the MGFSME. This will improve company access to finance at lower interest rates and under relaxed collateral requirements.

The Memorandum is meant to unite the efforts of the three institutions in the following main areas: establishing an effective mechanism for interaction among the partners to improve the process of investing the ESIF resources, promoting the activities of each of the parties to the document, implementing joint projects and initiatives. The document will further enable the parties to identify synergies in their activities to facilitate the financing of social and start-up enterprises. The agreement builds on the New Beginnings programme to promote entrepreneurship among vulnerable groups, which a partnership between BDB Microfinance and the Fund of Funds. The expansion of the partnership increases the amount of funds that can be channelled to businesses, as well as the scope of financing, enabling enterprises in Sofia to receive support for a wider range of activities. The following are now eligible for loans: purchase of land, infrastructure, real estate, second-hand fixed assets, purchase of trucks, refinancing of existing loans, etc. Priority will be given to requests from start-ups and mission-driven businesses. Companies will also be able to enjoy a longer repayment period.

On the occasion of the signing, FoF Executive Director Martin Gikov said, "The Tripartite Memorandum is a positive step in enhancing the inter-institutional cooperation between the FoF, BDB Microfinance and MGFSME. By leveraging the joint capacity of the three institutions, even more creative solutions for small and medium businesses can be provided. At the same time, it will be possible to achieve administrative synergies that will make it easier for the final recipients while responding as precisely as possible to their needs."