• EIF loan guarantees will help provide loans to SMEs in Bulgaria with better terms and conditions.
• EIF guarantees will help SMEs sustain jobs in the culture and creative sector.
• The support received is backed by EFSI.

The European Investment Fund (EIF) and Raiffeisenbank (Bulgaria) EAD have signed a guarantee agreement enabling the bank to increase its lending capacity to Bulgarian small and medium-sized enterprises (SMEs) and small public enterprises in the cultural and creative sectors by €10 million.

The guarantee agreement is backed by the European Commission’s Cultural and Creative Sectors Guarantee Facility, which is managed by the EIF. It also benefits from support from the European Fund for Strategic Investments (EFSI).

EIB Vice-President Lilyana Pavlova commented: “The COVID-19 crisis has had a major impact on every area of our society. As we rebuild our economies, the cultural and creative sector is in particular need of assistance. Today’s financing agreement with Raiffeisenbank is an important signal that the EIB Group is helping businesses in all areas of the economy, and builds on our long-standing support for Bulgarian businesses. In 2019, we helped 3 800 business and supported nearly 80 000 jobs. We stand ready to continue supporting the Bulgarian economy in the post COVID-19 recovery.”

EIF Chief Executive Alain Godard added: “Many banks in Europe have limited experience with businesses in the cultural and creative sectors. This is due to the often perceived high risk of such operations and the limited available collateral of the counterparts. With EU backing, today we are announcing a first-of-its-kind operation in Bulgaria that will unlock €10 million of new financing for businesses and small public enterprises in the cultural and creative sectors. We are happy to be leveraging our long standing cooperation with Raiffeisenbank to help Bulgarian businesses sustain jobs during the COVID-19 economic recovery.”

Valdis Dombrovskis, European Commission Executive Vice-President, said: “People working in cultural and creative SMEs have been especially affected by the lockdown measures due to the COVID-19 pandemic. I am glad that this funding agreement with Raiffeisenbank Bulgaria, supported by EFSI, will make additional resources available to sustain jobs in the cultural and creative sector, which is so vital for maintaining Europe’s cultural diversity and quality of life.”

Oliver Rögl, CEO of Raiffeisenbank (Bulgaria), added: “Thanks to our excellent cooperation with the EIF, to date we have supported 4 000 projects of Bulgarian small and medium-sized companies with more than €450 million. Now, we will extend our support to businesses and small public enterprises in the culture and creative sector, which was hit very hard by the pandemic and its consequences, but which is very important for society, especially in challenging times.”

Background information:

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

About Raiffeisenbank: Raiffeisenbank (Bulgaria) was established in 1994 and is the first green-field investment in the Bulgarian banking sector. Raiffeisenbank is a fully consolidated subsidiary of Raiffeisen Bank International AG (RBI). RBI regards Austria, where it is a leading corporate and investment bank, as well as Central and Eastern Europe (CEE), as its home market. 13 markets in the region are covered by subsidiary banks. Around 46 000 employees service 16.7 million customers through 2 000 business outlets, the by far largest part thereof in CEE.

About the European Fund for Strategic Investments (EFSI): The European Fund for Strategic Investments (EFSI) is the main pillar of the Investment Plan for Europe. It provides first loss guarantees enabling the EIB to invest in more, often riskier projects. The projects and agreements approved for financing under EFSI are expected to mobilise €514 billion in investment, supporting over 1.4 million start-ups and SMEs across the European Union.

Cultural and Creative Sectors Guarantee Facility (CCS GF): The CCS GF benefits micro-businesses and SMEs in the cultural and creative sectors, which often face difficulties in accessing affordable debt financing for their projects. The EIF’s guarantee aims to change that. Loans supported by the European Union under CCS GF are now available for business in all of the participating countries, which include the EU Member States, Iceland and Norway. The initiative is expected to create more than €600 million of new loans and other financial products for final beneficiaries through the guarantee’s catalytic effect. The guarantee facility encourages financial intermediaries to adopt a specific credit assessment approach with SMEs and organisations. They also have the opportunity to receive customised training to better understand the specific needs of the cultural and creative sector projects to increase their engagement in this area.