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BOYANOV & Co. Advised the European Investment Fund on the Implementation of the SME Initiative in Bulgaria

BOYANOV & Co. advised the European Investment Fund on the implementation of the SME Initiative for Uncapped Guarantee Instrument (SIUGI) in Bulgaria, and the respective Funding Agreement, Intercreditor Agreement and Pledge (Financial Collateral) Agreement concluded with the Government of the Republic of Bulgaria in March 2016.

The SME Initiative is a joint financial instrument combining ESIF resources, EU funds (Horizon 2020 and/or COSME) and EIB Group (EIF and EIB) funds, which aims to stimulate SME financing by providing partial risk cover for SME loan portfolios of originating financial institutions. The Uncapped Guarantee Instrument envisages provision of uncapped guarantee for the benefit of credit and leasing companies to cover the credit risk under loan and lease agreements provided to SMEs.

The implementation of SIUGI in Bulgaria will allow capital relief to financial institutions for provision of new debt financing to SMEs and thus improve SMEs access to European funding on advantageous terms, such as reduced interest rates and improved collateral requirements.  The guarantees provided by the EIF will cover up to 60% of the loss of any loan, without limit of the cover at portfolio level.

The instrument will become operational in Bulgaria during the third quarter of 2016 and it is expected to generate SME loans to the amount of EUR 600 million over the coming years, providing new opportunities for economic growth and job creation.





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