This DEM 40 million facility will provide credit lines to local banks to extend loans to local small and medium- sized enterprises (SME) in the tourism and associated sectors. A €5.1 million loan has been extended to the first participating bank under the facility, the Bulgarian American Credit Bank (BACB). The size of the sub-projects will be between DEM 0.2 and 2 million.
The Project will aim to provide long-term financing to the Bulgarian SMEs. A substantial proportion of the funds are expected to be disbursed to companies operating in the tourism sector.
SMEs play an important role in promoting private sector development and driving growth in transition economies. A critical obstacle in the development of the tourism sector in Bulgaria has been the limited access to long-term financing. The facility will act as a model for other businesses in supporting post-privatisation restructuring and encouraging private ownership.
The facility will be extended to selected Bulgarian banks. The first participating bank under the facility is the Bulgarian American Credit Bank, a Bulgarian bank, wholly owned by the Bulgarian American Enterprise Fund (BAEF). Since 1992 the BAEF and BACB have been amongst the very few sources of long-term finance to SMEs in Bulgaria.
The first loan provided under the facility is a €5.1 million senior loan with seven-year maturity.
DEM 40 million for the Facility.
€5.1 million for the Loan to BACB.
The participating banks will follow the EBRD's Environmental Procedures for Local Banks in relation to all sub-loans financed through the credit line. In implementing these procedures, the banks will assess potential environmental issues associated with sub-projects, which are required to comply with local/national health, safety, environmental and public consultation requirements and with World Bank environmental guidelines applicable to the tourism sector.
€70,500 was approved for carrying out a market study of the Bulgarian tourism sector.
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