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Leveraging public and private partnership to finance startups and social enterprises
Published on 30 November 2020
Bulgaria
This is the good practice's implementation level. It can be national, regional or local.
About this good practice
Mikrofond AD is a Bulgarian non-banking social and community responsible financial institution funding startups, micro-entrepreneurs, and sustainable projects with social impact. Provides financial tools that match the needs of startups in the development and graduation phase of their business.The financial tools are matched with the services provided by Mikrofond Sofia Foundation, which is the owner of MF AD- operates in 6 regional offices: Vratsa, Smolyan, Razgrad, Stara Zagora, Burgas, Sofia. The main services are an evaluation of business ideas, startup training, debt management training, mentoring, monitoring. The loans are popular among starting entrepreneurs in the region via the Vratsa office.
Recently the loans are up to 25 000 euros and are available due to the financial instrument" Microlending with shared risk", funded by an OP"Innovation and competitiveness" after approval of the business plan. Mikrofond AD is one of the financial intermediaries to on-lend to startups via this scheme and Fund of Funds is in charge of all financial instruments of EU programs in Bulgaria. http://www.fmfib.bg/en Servicing startups is not highly profitable for commercial banks, due to the limited scale and higher credit risk. The good practice is in providing reasonable price loan products by leverage private and public funding and cooperation between different stakeholders.
Recently the loans are up to 25 000 euros and are available due to the financial instrument" Microlending with shared risk", funded by an OP"Innovation and competitiveness" after approval of the business plan. Mikrofond AD is one of the financial intermediaries to on-lend to startups via this scheme and Fund of Funds is in charge of all financial instruments of EU programs in Bulgaria. http://www.fmfib.bg/en Servicing startups is not highly profitable for commercial banks, due to the limited scale and higher credit risk. The good practice is in providing reasonable price loan products by leverage private and public funding and cooperation between different stakeholders.
Resources needed
Financial capital- private and public
Trained and motivated staff to work with startups and young entrepreneurs
Networking with local, regional, and national institutions and organizations
Good communication campaign
Trained and motivated staff to work with startups and young entrepreneurs
Networking with local, regional, and national institutions and organizations
Good communication campaign
Evidence of success
Mikrofond AD has provided more than 10 000 loans for more than 25 000 000 euros to microbusinesses. Currently, more than 35% of the portfolio is startups. The Northwest region of Bulgaria accounts for 10% of the results achieved.
Managing to engage public funding from the Fund of Funds (BG) and offered the best price loan to startups - rate between 0,9% and 4,35%. More than 400 jobs were created by beneficiaries for 2019-2020. Additional business services were developed with a focus on startups
Managing to engage public funding from the Fund of Funds (BG) and offered the best price loan to startups - rate between 0,9% and 4,35%. More than 400 jobs were created by beneficiaries for 2019-2020. Additional business services were developed with a focus on startups
Potential for learning or transfer
A good example of cooperation between different stakeholders with a common goal-access to financing for startups in the smaller regions.
Public authorities ( local and national) can trigger success by providing financial capital
Mikrofond AD due to its social mission to support startups was able to structure a reasonable loan product and manage it.
Other partners provide training, consultations,
Regional networks provide information to beneficiaries sharing capabilities.
Regional offices of Mikrofond AD tailored services depending on the needs in the region they serve.
Public authorities ( local and national) can trigger success by providing financial capital
Mikrofond AD due to its social mission to support startups was able to structure a reasonable loan product and manage it.
Other partners provide training, consultations,
Regional networks provide information to beneficiaries sharing capabilities.
Regional offices of Mikrofond AD tailored services depending on the needs in the region they serve.
Further information
Website
Good practice owner
You can contact the good practice owner below for more detailed information.
Organisation
Agency for Regional and economic development
Bulgaria
Severozapaden
Contact
executive director