„The interest of Bulgarian businesses expressed in active demand for financing of innovative projects during the last year is quite substantial. Most active in this domain is the services sector“, shared Ms. Desislava Simeonova, leader of the KBC Group’s sustainable finance programme, BoD Member and Executive Director SME Banking at UBB, during the Banking Today forum.

„On the other hand, businesses with a higher carbon footprint have opted for cost optimization and this has impacted on the demand for funding of energy efficiency projects. Last year only the amount of the funding, provided by the Bank to projects for renewable electric energy sources approximated BGN 450 million. We mostly prefer projects, upon which the produced electricity will be used for the needs of a financed company’s core business, because their implementation will render our customer more independent in terms of energy and the cost value of its produce more predictable“, she added.

The event, organized by investor.bg, was held on 25.04.2024, in Inter Expo Centre Sofia. There the organizers gathered the opinions of representatives of leading financial institutions, regulators and experts on topics, related to trends and the future development of the banking, fintech and the insurance sectors in Bulgaria. Ms. Desislava Simeonova was part of the panel, dedicated to the funding environment in Bulgaria, the ESG, the eurozone and its impact on lending to businesses.

Ms. Simeonova assessed the business environment and the economic situation in Bulgaria as good. In her words „interest rate conditions for Bulgarian customers, both businesses and private individuals, especially upon funding in Bulgarian leva (BGN), have remained much more attractive than those on the global scale and that is why in economic perspective the trend in Bulgaria is positive“. As regards the enhancing ESG requirements, she defined the approach of UBB as educative, incentivizing and motivating and emphasized that the Bank and the Group as a whole use a large set of European programmes, involving guarantee instruments, including such, aimed at sustainability. „Their use results in mitigation of the risk for us and alleviation of the conditions for our customers with regard to collaterals and all this is being achieved at preferential prices“.

According to Desislava Simeonova the last several years have served as a „textbook on force majeure“, since nobody has ever anticipated, or has been able to forecast neither the Covid pandemic, nor the outburst of a war in Europe in the 21-st century, nor series of other concomitant crises. „During such situations of crises it is better for companies to cope with a smaller level of indebtedness, it is better to have buffers for going through periods of unfavourable developments“. 

The Executive Director of UBB has defined the open and very transparent communication with a partnering bank as extremely important and key to successful business relations. She addressed clients, seeking bank financing with the appeal to discuss their investment intentions, when available, with their funding institution at an earlier stage. For that reason, her advice to small and medium-sized businesses was to assess in a better way the scale of the planned projects, to allocate their investment intentions at stages, when possible, thus rending the risk for the company more manageable.

Her final message to the forum audience as leader of the KBC Group’s sustainable finance programme was: „It is our firm decision to prepare and help our customers in their sustainability-triggered transformation process, as our common goal is to grow stronger together and to win a competitive advantage for everyone“. 

Positions and opinions on the topics in the Funding for Businesses discussion panel were also voiced by Mr. Hristo Stoyanov, European Investment Fund; Mr. Pavel Lisev, Fund of Funds, Mr. Aleksandar Stanev, Sirma Group Holding; Mr. Krum Aleksiev, UniCredit Bulbank. Discussion moderator was Ms. Desislava Popova from investor.bg