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EBRD steps up support for leasing in Bulgaria
Bank lends €10 million to Raiffeisen Leasing Bulgaria
The EBRD is providing a second €10 million loan to Raiffeisen Leasing Bulgaria, part of Raiffeisen International, to support the expansion and further development of small and medium–sized enterprises (SMEs) in Bulgaria.
The proceeds of the loan will be used for extending leases to local companies to help them acquire equipment for the expansion of their businesses. Such capital investments include equipment, light commercial vehicles, trucks and trailers, cars for commercial use and real estate. The loan is complemented with grant support from the European Commission, including technical assistance services.
James Hyslop, EBRD country director for Bulgaria, said that as the country’s economy grows it is important that small and medium size entrepreneurs gain sufficient access to finance to meet their demands. This loan to Raiffeisen Leasing, an important partner for the EBRD, will help fill these needs. A healthy leasing industry will assist in bringing more finance to small and medium sized local companies, he added.
Dobromir Dobrev, Managing Director of Raiffeisen Leasing Bulgaria, said that Raiffeisen Leasing Bulgaria is already a strong supporter of the small and medium-sized enterprises in Bulgaria. The company, established in 2004, currently has a 10.27 percent market share of the Bulgarian leasing market and ranks 3rd among the major players on the market. Through its network of 14 branches Raiffeisen Leasing Bulgaria aims to further expand its position, serving local SMEs, stated Dobrev.
The new loan to Raiffeisen Leasing is the EBRD’s second leasing deal with the company. In 2006, Raiffeisen Leasing received a first €10 million loan under the EBRD/EU leasing facility. Under the first facility, Raiffeisen Leasing has extended 560 leases totalling EUR 14.2 million to small and medium size companies across Bulgaria. This second EBRD loan is expected to help Raiffeisen Leasing expand its presence on the leasing market outside Sofia.
Raiffeisen Leasing Bulgaria is part of Raiffeisen Group in Bulgaria. Raiffeisen Leasing Bulgaria OOD was established in 2004 with shareholders Raiffeisenbank (Bulgaria) EAD, holding 24.5% of its shares and Raiffeisen Leasing International GmbH, holding 75.5%. Raiffeisen Leasing Bulgaria OOD owns 100% of the shares of Raiffeisen Auto Leasing Bulgaria EOOD.
The EBRD, the largest single investor in Bulgaria, has provided significant finance to the country’s SME sector through lending and leasing projects under the EU/EBRD SME Finance Facility. The Bank has so far extended €151 million of loans to 9 banks and 4 leasing companies for on-lending and leasing to SMEs, helping entrepreneurs to start up or expand their businesses.
The EU/EBRD SME Finance Facility is a joint programme of the European Commission and the EBRD, supporting the development and growth of entrepreneurs as well as small and medium size companies by facilitating their access to finance. Under this regional programme covering 11 countries, the EBRD has committed EUR 1,156.5 million to date, supported by EUR 154.24 million in grant financing and technical assistance from the EC since the launch of the programme in 1999.
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