Bulgarian Development Bank pledges support for local SMEs amidst coronavirus crisis

Bulgarian Development Bank pledges support for local SMEs amidst coronavirus crisis

The Bulgarian Development Bank (BDB) will implement a set of programmes aimed at mitigating the negative effect of the coronavirus disease (COVID-19) pandemic on local small and medium-sized enterprises (SMEs), it said on Friday.
"After the increase of the bank's capital announced by the government becomes fact, BDB will disclose publicly and in a transparent way all the criteria by which the new programmes for support of SMEs will be put into action," the state-owned bank quoted Iliya Lingorski, chief economist at BDB, as saying in a TV interview.
Earlier this week, Bulgaria's finance minister Vladislav Goranov said that the government intends to increase the capital of BDB by 500 million levs ($273 million/256 million euro) in order to support businesses affected by the coronavirus pandemic. The funds will be used to issue portfolio guarantees to commercial banks and to allow the BDB to temporarily acquire stakes in affected businesses with a repurchase option
The programmes include a set of measures which will support the banking sector's capacity to maintain the access of SMEs to financing intact in the context of the COVID-19 pandemic.
The support programme is focused on wallet guarantee, which BDB, through its already increased capital, can provide to commercial banks based on a number of criteria. Decisions regarding loan activity in this emergency programme will depend on banks and will remain based on market principles, Lingorski explained.
According to Lingorski, the most important thing at the moment is to keep the banking system as close as possible to its normal way of functioning so that the access of entrepreneurs and SMEs to financing is not hampered.
After the initial shock caused by the COVID-19 crisis BDB will be able to contribute with programmes for accelerated development in the period needed for the economy to recover and return to stability, Lingorski noted.

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