This is made possible after the National Guarantee Fund signed contracts with seven partner banks: Bulgarian American Credit Bank, DSK Bank, Postbank, UBB, Raiffeisenbank, EIBank and CCB. The main selection criteria are the proposed low interest rates (around 7%), the relaxed loan approval process (no fees asked) and the priority processing of loan applications (between 8 and 21 days).
‘By launching the Guarantee Fund we will support sectors such as fruits and vegetables, young farmers, who are willing to modernize their premises, and small agricultural holdings that want to come out on the market. In this way, money will indeed change the image of Bulgarian agriculture,’ said Svetlana Boyanova, deputy minister of agriculture and food.
Eligible loan applicants are beneficiaries in good financial condition who are small or medium-sized enterprises with contracts signed under one of the three measures -- Measure 121 Modernization of Agricultural Holdings, Measure 122 Improving the Economic Value of Forests and Measure 123 Adding Value to Agricultural and Forest Products. The Guarantee Fund will cover up to 80% of the loan, with the candidate securing the remaining 20%. The seven commercial banks will be responsible for the entire lending process.
The fund will guarantee loans of a combined value of over BGN 700 million. The guarantees will be valid until September 2015, and beneficiaries will be granted a 10-year repayment period. Past experience in implementing measures 121, 122 and 123 has shown that they require substantial financial resources, which candidates normally cannot provide and therefore need bank financing. Hence the other challenge before beneficiaries -- to secure the loans. ‘Having signed the contracts, we will solve the key issue of [beneficiaries] providing own financial resources and I anticipate huge interest by businesses,’ Boyanova concluded.