Strengthening the competitiveness of Bulgarian companies through improved access to finance, the European Bank for Reconstruction and Development (EBRD) and Bulgaria’s Société Générale Expressbank AD (SGEB) are joining forces under a risk-sharing agreement.
The Risk Sharing Framework (RSF) is one of the three core financing frameworks of the EBRD's Small Business Initiative, the strategic programme dedicated to supporting and developing the Bank’s SME clients. It is designed to allow the EBRD to share partner banks’ exposures to local enterprises via either funded or unfunded risk participation. Under this new RSF in Bulgaria, the EBRD will share risk in individual eligible loans extended by SGEB to local enterprises. In turn, the new instrument will allow SGEB to meet the financial needs of its clients in a more efficient way.
SGEB is a long-standing client of the EBRD in Bulgaria with a successful track record of lending to local companies, which accounts for about two-thirds of its gross loan book. It is the first Bulgarian and the first EU member state lender to enter into a RSF risk participation agreement with the EBRD.
Larisa Manastirli, EBRD Director for Bulgaria, said: “We are very pleased to launch the risk sharing facility in Bulgaria in cooperation with SGEB, a reliable partner of ours. SGEB remained an active lender during the financial crisis and managed to grow its loan portfolio in a stagnating market environment. The new facility should help it better meet the financing needs of Bulgarian companies and we are looking forward to our first joint transaction.”
Société Générale Expressbank is the Bulgarian subsidiary of the French lender Société Générale and is one of the top 10 largest financial institutions in Bulgaria. The bank is among the leaders in the corporate segment on the Bulgarian market with a loan portfolio of €1.21 billion and more than 17,000 clients, leveraging the structured finance and investment banking expertise of Société Générale. The bank’s strong local franchise on capital markets was recognised by the Bulgarian Ministry of Finance with the award for the most active customer trade participant in the T-securities market for the sixth consecutive year.
The EBRD is one of the largest institutional investors in Bulgaria. To date, the EBRD has invested over €3.4 billion in more than 230 projects in the country. Some 80 per cent of the Bank’s investments in Bulgaria are in the private sector.
In 2016 the EBRD invested €620 million in the Bulgarian economy. In the years ahead, the Bank will aim to keep the level of investment at about €200 million annually in response to local demand.