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EBRD and DSK Bank strengthen competitiveness of firms in Bulgaria

By Olga Aristeidou

  • EBRD and DSK Bank joining forces under risk-sharing agreement
  • Existing unfunded risk-sharing limit to be increased from €30 million to €75 million
  • New funds to boost competitiveness of SMEs in Bulgaria

The European Bank for Reconstruction and Development (EBRD) and DSK Bank are joining forces under a risk-sharing agreement to improve access to finance for companies in Bulgaria.

The two partners are reactivating and increasing an unfunded risk participation framework agreement from €30 million to €75 million.

The agreement was originally signed with Société Générale Expressbank in April 2017, under the EBRD’s Risk Sharing Framework. In 2018, Société Générale reached an agreement to sell its majority stake in Expressbank to DSK Bank. Expressbank was successfully merged into DSK in May 2020. 

DSK Bank is member of OTP Group, the largest financial service provider in Hungary and a regional leader in central and eastern Europe. A longstanding leader in retail banking in Bulgaria, DSK Bank has established its firm position in both retail and corporate banking, with the largest number of clients in the country.

The EBRD’s Risk Sharing Framework (RSF) is one of the three core financing frameworks of the EBRD's Small Business Initiative, a strategic programme dedicated to supporting and developing the small and medium-sized enterprise (SME) clients of the Bank. It is designed to allow the EBRD to share partner banks’ exposures to local enterprises via funded or unfunded risk participation. Under this RSF in Bulgaria, the EBRD shares the risk of individual eligible loans that DSK extends to local enterprises.

Anca Ioana Ionescu, EBRD Head of Bulgaria, said: “We are very pleased to continue our work under the risk-sharing facility in Bulgaria in cooperation with DSK Bank. The EBRD remains committed to securing the competitiveness of local businesses and the new increased facility will help to better meet their financing needs in this difficult period.”

”With the new agreement we further strengthen and expand our partnership with the EBRD. Disbursement of funds under the new line will not differ significantly from the usual credit process. The risk-sharing scheme will allow Bulgarian companies to receive support from the EBRD, without the additional complications and difficulties that usually accompany cross-border financing. Together, we will focus on environmental, social and governance (ESG)-positive projects and those that increase the competitiveness of local businesses – both of primary importance for DSK Bank,” said Arnaud Leclair, Executive Director and Head of the Risk Management Division at DSK Bank.

The EBRD is one of the largest institutional investors in Bulgaria. To date, the EBRD has committed more than €4.3 billion to 275 projects in Bulgaria. 

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