New Operational Program in Bulgaria to Improve SME’s Access to External Financing
Bulgarian small and medium-sized enterprises (SMEs) will be able to access EUR 102 M from the European Regional Development Fund (ERDF) under a new operational program, “SME Initiative.”
The project of the operational program, which seeks to boost the competitiveness of SMEs, is available online at the public consultation portal, according to reports of investor.bg.
The resources provided under the operational program are to be distributed by banks.
Talks were held with seven banks in June in connection with the plans of the government to launch the scheme, a sort of a guarantee instrument in support of small and medium-sized businesses.
The authors of the project seek to make sure that 55% of SMEs in Bulgaria have managed to get funding via bank loans by 2023.
The year 2010 is used as a basis for comparison, when 42.5% of the small and medium companies in Bulgaria received loans.
The improved access to funding is expected to boost the productivity of SMEs (value added at factor costs/employee ratio) to 19.3 percentage points, compared to 16.8 percentage points in 2012, the base year.
The need for the launch of an operational program targeting SMEs was triggered by a report of the European Commission indicating that the economic crisis in 2009 caused 37% of SMEs to cut staff and 22% of SMEs to cut salaries and 22% of SMEs to postpone investment plans.
In the period 2010-2011, 45% of SMEs in Bulgaria had difficulties accessing external financing, while 80% of these companies complained of insufficient resources to implement the necessary investments.
By launching the new operational program, which is to provide uncapped portfolio guarantees, the Bulgarian government seeks to facilitate companies’ access to external financing.
The measure is to enhance the companies’ productivity and rates of innovation and competitiveness on new markets, as well as to encourage job creation.
The Managing Authority of the new operational program will be the Chief Directorate "European Funds for Competitiveness" of the Economy Ministry.
Bulgaria’s Finance Ministry, via the European Union Funds Audit Executive Agency, will be in charge of overseeing the distribution of the resources under the program.
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