Bulgaria's Fund of Funds seeks financial intermediaries to provide loans in rural areas

Bulgaria's Fund of Funds seeks financial intermediaries to provide loans in rural areas

The Fund of Funds (FoF) in Bulgaria, which manages four EU operational programmes, said that it launched a procedure for the selection of financial intermediaries to manage an instrument for lending in rural areas which is funded under EU's operational programme Rural Development 2014-2020.

The financial instrument has a budget of 38.3 million levs ($23.7 million/19.6 million euro) allocated among three lots but the prospective intermediaries are expected to top up the public resources with private capital, bringing the total loanable funds to over 60 million levs, the FoF said in a statement published earlier this week.

Once the selection procedure for intermediary firms is completed, low-interest loans will be available to agricultural producers and other businesses in rural areas. The deadline for submitting applications in the selection procedure is March 22, the fund added.

The FoF will co-finance two types of low-interest loan - top-up of project grants already awarded, with the FoF participating with up to 50% of the loan amount, or stand-alone loans, with the fund participating with up to 70%.

Local farmers will be able to borrow up to 2 million levs, while access to loans under more favourable terms will also be open also to enterprises involved in non-agricultural business activities in rural areas, including manufacturing, trade, handicrafts and services such as accounting, utility and repairs. The companies can use the money both for investment and for working capital, the FoF said.

Preferential terms will include below-market interest rates, relaxed application requirements and lower surety requirements. The allocated funds are expected to provide support to at least 130 entities, the fund also said.

The main activity of FoF is the structuring and management of financial instruments co-financed by the European Structural and Investment Funds during the 2014-2020 programming period.

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