July 21 (BTA) - Nine banks have expressed willingness to provide anti-crisis loans to small and medium-sized enterprises, guaranteed by the Fund of Funds (FOF), in response to the economic crisis related to the COVID-19 pandemic, the FOF said.

By the deadline of July 17, 2020, applications were submitted by the Bulgarian-American Credit Bank, United Bulgarian Bank, Eurobank Bulgaria, UniCredit Bulbank, First Investment Bank, Tokuda Bank, DSK Bank, D Commerce Bank and Raiffeisenbank. All financial institutions with a valid banking license and permission to provide loans had the right to apply for partnership, the FOF recalled.

The total financial resource for guarantees requested by the candidate banks exceeds the budget of nearly 158 million leva, determined by the FOF for this financial instrument. By the end of this month, a list of potential partner banks that are eligible to sign a guarantee agreement will be finalized. The goal is for the new "Portfolio guarantee with a loss ceiling for overcoming the consequences of COVID-19" to be available to final recipients by September 2020.

Through its new guarantee product, the FOF will assume part of the credit risk of financial institutions when granting new loans to small and medium enterprises without sufficient collateral, meeting the need for support in the current difficult situation, the FOF said. This will facilitate businesses' access to loans so that they are able to continue operations, including meeting liquidity needs and/or overcoming financial difficulties due to or aggravated by the pandemic.

The FOF offers a guarantee of up to 80 per cent of the amount of each loan, against which the respective bank will have to offer financing at preferential interest rates and reduced collateral requirements, the press release recalled. The structure of the product provides for a combination of a guarantee instrument and an interest rate subsidy for companies that are experiencing liquidity difficulties but are nevertheless willing to retain their staff. The instrument "Portfolio guarantee with a loss ceiling for overcoming the consequences of COVID-19" is funded by the Operational Programme "Innovation and competitiveness" 2014-2020. NV/DT
/DT/