Another €150 mln in loans become available to businesses

OP Development of the Competitiveness of the Bulgarian Economy 2007-2013 will provide the JEREMIE Holding Fund with an additional €150 mln for the introduction of a new financial instrument which will ease credit conditions for businesses by sharing risks, promoting entrepreneurship along the way, according to the Ministry of Economy, Energy and Tourism. The goal is to make access to borrowing easier for small and medium-sized enterprises (SMEs) by lowering considerably interest rates offered by creditors. SMEs will enjoy a zero-percent interest rate on loans under the JEREMIE scheme and market rates on the rest of the money extended by credit institutions. This essentially halves the borrowing costs businesses will have to pay. Bulgarian SMEs will be able to use the cheap loans to fund their own investment projects, as well as satisfy their working capital needs. The maximum maturity of the loans will be 10 years. In addition to significantly lower interest rates, these loans will require much less collateral and service charges. Payments under the new scheme will be made by credit institutions, which will have to co-finance the credits taking on 50% of the sum. The plan has the potential of doubling the total amount of credits for SMEs to €300 mln. Creditors participating in the programme will be selected by the European Investment Fund, which manages the JEREMIE initiative in Bulgaria. SMEs will be able to tap this source of borrowing in leva or Euro from the first quarter of 2013 until the end of 2015.

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