The European Investment Fund (EIF) has registered strong interest from Bulgarian credit institutions towards the newest financial instrument to be deployed under the JEREMIE Initiative in Bulgaria. The deadline for submission of expressions of interest under the product fell on the 28th of September 2012 with a total of 17 credit institutions expressed interest to become Financial Intermediaries and requesting a total allocation exceeding EUR 550 m from JEREMIE Holding Fund (representing an oversubscription by 3.8 times on the current budget allocated).
Under the new financial instrument, the allocation of EUR 150m from the Operational Programme “Development of the competitiveness of the Bulgarian economy 2007-2013”, matched by the funding required from Financial Intermediaries, will amount to EUR 300m to be channelled to SMEs in the form of loans with preferential interest rates until 31 December 2015.
EIF considers the strong interest expressed as a firm indicator of the necessity and the attractiveness of the product both for the SMEs and the credit institutions. In addition, the high competition for the product is to logically lead to further improvement of the conditions for the final beneficiaries of the funding: the Bulgarian enterprises.
EIF is currently in the process of selecting financial intermediaries. It is expected that the first loans to SMEs will be available in the first quarter of 2013.
About the EIF
EIF’s central mission is to support Europe’s small and medium-sized businesses (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, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. The EIF total net commitments to private equity funds amounted to over EUR 6bn at end 2011. With investments in over 370 funds, the EIF is a leading player in European venture capital due to the scale and the scope of its investments, especially in high-tech and early-stage segments. The EIF guarantees loan portfolio totalled over EUR 7.6bn in close to 220 operations at end 2011, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.
About the JEREMIE Initiative
JEREMIE (Joint European Resources for Micro to Medium Enterprises) is a joint initiative launched by the European Commission (Directorate General Regional Policy) and the European Investment Bank group to improve access to finance for SMEs in the EU within the Structural Funds framework for the period 2007 – 2013. JEREMIE enables the EU Member States and Regions to put money from the structural funds and also national resources into holding funds that can finance SMEs in a flexible and innovative way. The new initiative aims at developing and fostering the role of entrepreneurship within the EU in order to meet the objectives of the Lisbon agenda and help structural funds to deliver greater benefits to the market. At the level of the European Union, the EIF has currently signed 13 Holding Fund agreements.
In Bulgaria, the JEREMIE Holding Fund is financed from the European Regional Development Fund and co-financed by 15% by the State Budget within the framework of the Operational Programme Development of the Competitiveness of the Bulgarian Economy 2007 – 2013. Under JEREMIE Initiative in Bulgaria, EIF has developed instruments providing support at all stages in the development of enterprises in Bulgaria – Pre-Seed and Seed for emerging entrepreneurs, VC for the enterprises in their early stages, as well as Growth and Mezzanine targeted at more mature, established companies seeking expansion opportunities.