First CIP guarantee deal in Bulgaria

The European Investment Fund (EIF), the European Union's financial body for SMEs (small and medium-sized enterprises) and the Bulgarian Development Bank (BDB), have signed a significant guarantee agreement under the European Union's (EU) Competitiveness and Innovation Framework Programme (CIP) in Bulgaria.

This EIF and BDB guarantee agreement allows the bank as a financial intermediary the opportunity to provide further access to finance to SMEs across the country. BDB is a state bank institution which enhances SMEs access to debt finance by providing long term financing.

BDB was also one of the first intermediaries to work with the EIF following the enlargement of the European Union and this recent deal marks the first of its kind under the CIP in Bulgaria.

 Background information:

The CIP, which spans from 2007 to 2013, has been put in place to boost European productivity, innovation capacity and sustainable growth, whilst simultaneously addressing complementary environmental concerns.

Within the framework of the CIP, the EIF has been allocated EUR 1.1bn to be split between venture capital - with the High Growth and Innovative SME Facility (GIF) - and guarantees - with the SME Guarantee Facility (SMEG).

Under the SMEG, financial institutions are encouraged to enhance access to finance for SMEs.  The facility offers an excellent tool to allocate additional financing volumes for those SMEs that would not otherwise have access to resources and financial engineering instruments because of the increased lending risk entailed.  As such, The SMEG complements and broadens EIF's own product offering.

The EU CIP SMEG Facility gives the EIF the opportunity to play an essential role in supporting sustainable job creation and entrepreneurship in European SMEs. 

About EIF

The EIF central mission is to support Europe's SMEs by helping them to access finance.  EIF designs and develops venture capital and guarantees instruments which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. The EIF commitment in guarantees totalled over EUR 11.6bn in some 190 operations at end August 2008, positioning it as a major European SME guarantees and securitisation actor and a leading micro-finance guarantor.

For further information, please contact David Yormesor, d.yormesor@eif.org