Raiffeisenbank (Bulgaria) EAD became the first privately-owned Bulgarian bank to sign a Portfolio Guarantee issued by the European Investment Fund (EIF) under the European Union's (EU) Competitiveness and Innovation Framework Programme (CIP) for Bulgaria. The Portfolio Guarantee amounts to 72 million euros, Raiffeisenbank Bulgaria said in a press release yesterday.

Commenting on the transaction, EIFs Chief Executive Richard Pelly said, quoted in the press release: "The European Community CIP program gives EIF the opportunity to renew its collaboration with Raiffeisenbank in support of small and medium sized enterprises (SMEs). We hope that it will be another success story which will further help growth and entrepreneurship in the region, particularly in the current economic context".

The facility makes it possible for Raiffeisenbank Bulgaria to provide its SME and micro clients with enhanced access to finance by offering them more flexible criteria, reduced collateral and interest rates and extended loan maturity.

"Thanks to this facility, Raiffeisenbank will further support the business development and the competitiveness of Bulgarian SMEs by financing projects in technological development, innovation and technology transfer", said Momchil Andreev, CEO of Raiffeisenbank Bulgaria.

The CIP Guarantee allows the bank to provide loans to micro and SME companies with a maximum loan amount of 300,000 euros and a minimum term of 18 months.

According to the preliminary and unaudited results, in 2008 Raiffeisenbank kept its leading position in financing SMEs. Its loan portfolio in the segment reached nearly 2,000 million leva, or up 32 per cent from 2007. Compared to December 31, 2007, in 2008 the bankТs overall profit after tax increased by 22 per cent, reaching 132.6 million leva.

This facility is the EIFТs second Guarantee Scheme to Raiffeisenbank Bulgaria. In 2006, the Bank signed EUR 20 million MAP (Multiannual Programme for Enterprise) Guarantee Facility which was successfully implemented by the end of 2008, says the press release.

Source: BTA