First RSI guarantee agreement in Bulgaria for innovative businesses

The European Investment Fund (EIF) and First Investment Bank (FIB) have signed a guarantee agreement to support lending to innovative small and medium-sized enterprises (SMEs) as well as Small Mid-caps under an initiative funded by the European Commission.

The new agreement signed under the Risk Sharing Instrument (RSI) initiative allows FIB to provide innovative companies in Bulgaria with access to a total of EUR 15m of debt financing over the next two years with support of the 50% guarantee offered by the EIF. This enables FIB to offer innovative companies additional financing at favourable conditions.

This is the first RSI agreement in Bulgaria and the 23^rd in Europe so far, bringing the total loan finance available to innovative businesses across the EU under this initiative to well above EUR 2bn. The agreement signed today will help the bank to finance innovative businesses across the country.

Commenting on the signature in Sofia, Head of Risk Sharing Instruments at the EIF, Vincent van Steensel said: “I am pleased to be signing the first Risk Sharing Instrument (RSI) agreement in Bulgaria, under a DG Research and Innovation FP7 programme in support of innovative small and medium sized enterprises with First Investment Bank. I am confident that FIB, will ensure that much needed finance will be quickly channelled to a number of innovation driven businesses across the country.”

Mr. Vassil Christov, Executive Director of Fibank, commented: “After signing the today’s agreement, Fibank will be able to provide additional lending at more favorable conditions to SMEs across the country. I would like to thank the European Investment Fund for the successful cooperation”.

The aim of the RSI Facility is to encourage banks to lend to SMEs and small mid-caps with fewer than 500 employees in need of investment financing and/or operating capital to support research, development and innovation activities, with EU financial support. Banks are being selected by the EIF following a call for expression of interest for financial intermediaries across Europe.

About Risk-Sharing Instrument (RSI) under FP7

The RSI facility aims to encourage banks to provide loans of up to €7.5 million to SMEs and small mid-caps undertaking research, development or innovation, and seeking finance for investments and/or working capital. The RSI is a joint initiative of the EIF, the European Investment Bank (EIB) and the European Commission. It is supported by the European Union under the Seventh Framework Programme for Research and Technological Development (FP7) and uses EIF's risk-taking capacity. It is part of, and complements, the existing Risk Sharing Finance Facility (RSFF), managed by the EIB.

Under this facility, the European Investment Fund (EIF) is providing guarantees to banks and leasing companies that lend to SMEs and Small Mid-Caps. The guarantee covers, upon default, up to 50% of the outstanding amount of each loan. Some 25 or so banks are expected to be involved in the pilot phase, allowing the RSI to reach a total loan volume of up to €2.5 billion channelled to innovative SMEs and Small Mid-caps.

The call is open to financial or credit institutions, established and operating in the EU and/or countries associated to FP7, including, Iceland, Liechtenstein, and Norway, Switzerland, Israel, Turkey, the former Yugoslav Republic of Macedonia, Serbia, Albania, Montenegro, Bosnia & Herzegovina, the Faroe Islands and Moldova.

About the EIF

EIF's central mission is to support Europe's micro, small and medium-sized businesses by helping them to access finance.  EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. EIF’s total net commitments to private equity funds amounted to over EUR 6.9bn at end 2012. With investments in over 435 funds, EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. EIF’s guarantees loan portfolio totalled over EUR 4.7bn in close to 255 operations at end 2012, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.  

Media contacts:

EIF: David Yormesor
Tel.: +352 42 66 88 346, e-mail: d.yormesor@eif.org

First Investment Bank: Ivailo Alexandrov
Tel.: +359 2 800 27 53, e-mail: i.alexandrov@fibank.bg