EIF and KfW sign deal helping to develop the Bulgarian SME securitisation market

The EIF and the German promotional bank KfW are jointly supporting a ProCredit Bank Bulgaria true-sale securitisation deal for loans to small and medium sized enterprises (SME) in Bulgaria.

This deal is crucial for the development of the Bulgarian SME market given that around 3,400 Bulgarian SMEs will benefit from this transaction. To date, securitisation as a means of funding, has remained relatively untapped by Bulgarian originators despite its potential for growth.

Commenting on the deal, EIF Chief Executive, Richard Pelly said: “The EIF is pleased to continue its support for the funding of this important market player which is committed to SME and Micro lending in Bulgaria. We hope that this will lead to further SME securitisation activity, providing necessary support for this vital part of the European economy”.

Thanks to this deal with KfW and the EIF, ProCredit Bank Bulgaria will use the proceeds from this securitisation transaction to extend new SME financing.

Uwe Ohls, Director General at KfW for Europe & Asia, said: “By enabling ProCredit Bank Bulgaria to further expand its SME lending business, also in rural and less developed areas, the project contributes to increased growth, employment and further strengthening of the financial sector and capital market in Bulgaria. The project builds on the longstanding and successful cooperation of KfW with ProCredit Bank Bulgaria and the ProCredit Group."

The transaction is a true sale, revolving cash securitisation of Bulgarian SME loans that replaces an existing deal that EIF entered into in 2006.  Thanks to the EIF’s guarantee and KfW’s investment, ProCredit Bank Bulgaria can provide up to an additional EUR 85m of support for SMEs in Bulgaria.

About the EIF

EIF's central mission is to support Europe's small and medium-sized businesses (SMEs) by helping them to access finance.  EIF primarily designs and develops venture capital and guarantees 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. The EIF total net commitments to venture capital and private equity funds amounted to over EUR 5.4bn at end 2010. With investments in over 300 funds, the EIF is the leading player in European venture capital due to the scale and the scope of its investments, especially in the high-tech and early-stage segments. The EIF commitment in guarantees totalled over EUR 14.7bn in close to 160 operations at end 2010, positioning it as a major European SME loan guarantees actor and a leading micro-finance guarantor.

The EIF is continuing to play an important role in reviving the EU securitisation market and since the financial crisis, has already supported significant securitisation deals including transactions with both Lloyds and UniCredit banks.

About KfW Bankengruppe

KfW is the German promotional bank with the mission to promote economic, social and ecological development worldwide. As an entirely state-owned bank held by the Federal Republic and the Länder (German federal states), the bank offers support to encourage sustainable improvement in economic, social, ecological living and business conditions, among others in the areas of SME’s, entrepreneurial enterprise, environmental protection, housing, infrastructure, education finance, project and export finance, and development cooperation. www.kfw.de

Contacts:      

• David Yormesor, EIF Communications Unit, tel +352 426 688 346, e-mail: d.yormesor@eif.org
• Dr. Charis Poethig, KfW Communications Unit, tel +49 69 7431 4683, e-mail: charis.poethig@kfw.de