The Fund of Funds (FoF) in Bulgaria said on Friday that it will finance low-interest loans for agriculture producers and other businesses in the country’s rural areas with a total of 20 million euro ($23.6 million).
The financing allocated to the new FoF financial instrument is provided by EU’s Rural Development Programme, with 17 million euro sourced from the European Agricultural Fund for Rural Development and 3 million euro from national co-financing, the Fund explained in a statement.
FoF will co-finance two types of low-interest loans – top-up loans to complement already received project grants, with the FoF participating with up to 50% of the loan amount, and stand-alone loans, with the FoF participating with up to 70% of the loan amount.
Each agricultural producer will be able to borrow up to 1 million euro. Borrowing under favourable terms will be accessible for non-agricultural operations as well, including for manufacturing of and trade in various products, crafts and services such as accounting, utilities, repair, veterinary care. The maximum amount of the loan in those cases will be 600,000 euro.
The loans can be used for both investment and working capital purposes, the Fund of Funds said.
The businesses can benefit from the financial instrument, once a procurement procedure to select the intermediary banks that will administer the lending is carried out, the FoF noted adding that future intermediary banks are expected to leverage the public funds with private financing, bringing the total lending amount to over 31 million euro.
