The European Investment Bank is expanding its support to small and medium enterprises (SMEs) in Bulgaria through a new global loan to DSK Bank. The EUR 30 million global loan will be used to give more access to finance for small and medium enterprises as well as municipal infrastructure projects in Bulgaria.
The EIB loan will enable DSK Bank to onlend using the favourable conditions of the EIB for up to EUR 20 m to SME clients. Another EUR 10 m portion of the loan will support infrastructure finance notably in the municipal sector. This amount will be complemented by a EUR 1.25 m grant from the European Commission under the EU-EC Municipal Finance Facility. DSK Bank is the third banking partner in Bulgaria to participate in the EIB-EC-Municipal Finance Facility, which supports the development of Bulgarian municipalities via EU grants.
This global loan will enable EIB to provide much-needed medium and long term funding for Bulgarian small and medium-sized enterprises and municipalities, said Philippe Maystadt, President of the EIB. SME form the backbone of a vibrant economy, and the EIB's credit line will not only continue to assist SME development in the country but will also strengthen local financial institutions. The loan will also support the important needs in municipal infrastructure and the combination with EU grants under the Municipal Finance Facility will result in improved financing conditions.
DSK Bank was established in 1951 as the State Savings Bank. Since its successful privatisation in October 2003, Hungary's OTP Bank became, the sole owner of DSK Bank's share capital. The small and medium enterprise sector has been one of DSK's core target segments accounting for a sizeable portion of the bank's loan portfolio. At the same time the bank is strategically oriented towards the municipal financing area, making DSK an ideal partner for the EIB's strong growing operations in Bulgaria.
The EIB has provided since the 1990's over EUR 180 million in global loans to support small businesses in Bulgaria through 8 local banks. Global loans are credit lines to financial intermediaries - EIB partner banks that on-lend EIB funds under their own management, at their own risk and on their own conditions but pass on the benefits from the EIB's favourable lending conditions.
This type of lending is used by the EIB to finance small and medium-sized projects involving a total investment of less than EUR 25 million. To access finance for SMEs or local authorities and to check specific requirements, contact the local finance institutions directly. A full list of intermediaries is provided on the Banks' web site
The EIB is committed to supporting the development of Bulgaria's economy to help to prepare the country for EU membership. The EIB's cumulative financing in Bulgaria stands at EUR 1,24 billion and relates to investments in a wide range of key economic sectors.