First Loss Portfolio Guarantee (FLPG)

FLPG stands for First Loss Portfolio Guarantee instrument. The purpose of this financial instrument is to stimulate bank lending to Micro, Small and Medium-sized Enterprises (SMEs) by providing credit risk protection (in the form of a first loss portfolio capped financial guarantee) in order to reduce the particular difficulties that SMEs face in accessing finance because of the lack of sufficient collateral in combination with the relatively high risk they represent.

The overall budget of the instrument allocated under JEREMIE in Bulgaria is an amount of EUR 78.4 million. As the instrument requires the Financial Intermediaries (FI) to contribute resources five times larger than the public funds allocated, the total budget coupled with the private contribution equals EUR 392 million.

Key Terms

The main objective of the instrument is to provide credit risk protection to the Financial Intermediaries translating into preferential conditions for the SMEs obtaining loans. The preferential conditions may vary between Financial Intermediary, industry, SME, loan purpose, maturity and other parameters. The key terms of the instrument are as follows:

Preferential conditions: Reduced collateral requirements, interest rate and associated fees & taxes on the loans extended.
Maximum loan amount: Up to EUR 1.875 million.
Guarantee level: Up to 80% of each loan included in the Financial Intermediary’s portfolio.
Loan Purpose: Investment and / or working capital.
Maturity: up to 120 months (10 years) with the possibility of a grace period.

Eligibility Conditions:

  • The borrower must be registered under the Commerce Act of Bulgaria
  • The borrower must be an SME;
  • The borrower must not be a “firm in difficulty”;
  • The borrower or the transaction to be financed must not be operational in the sectors stipulated by Article 1, paragraphs 1 of Reg. 1998/2006;
  • Furthermore, investments are subject to restrictions in relation to SMEs active in the following sectors:
       1. Arms production and trading;
       2. Gambling;
       3. Tobacco;
       4. Human cloning;
       5. Genetically Modified Organisms.

Note: Re-financing of an existing loan is not permitted through this instrument.

Selected Financial Intermediaries
EIF has signed 5 Guarantee Agreements with five Bulgarian banks totalling
loans of EUR 392 million in July 2011. Since then, CIBank, ProCredit bank, Raiffeisen bank, Unicredit Bulbank and United Bulgarian Bank have been extending loans with preferential conditions to the SMEs. The respective eligibility requirements and contact details of each bank are presented below:



Tel: (02) 90 29 144 / 157 / 263 / 309






ProCredit Bank (Bulgaria)

Tel: +(359) 700 1 70 70 
Web: ProCredit JEREMIE Loans  






Raiffeisenbank (Bulgaria)

Tel: +(359) 2 91 985 101
Web: Raiffeisen JEREMIE Loans   



Unicredit Bulbank

Daniel Enchev, Kiril Stoychev
Tel: +(359) 2 923 25 77 / 23 80
Web: JEREMIE Loans by UniCredit Bulbank 



United Bulgarian Bank
Telephone: 0700 117 17

Continue reading