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The Municipal Guarantee Fund for SMEs is a unique financial instrument launched and developed by the Sofia Municipality in support of the entrepreneurship and innovation ecosystem in one of the fastest growing capitals in Europe. It aims at raising the competitiveness and success rate of SMEs in Sofia and applying the ”Think Small First“ principle at the heart of the municipal economic policy. The Fund has the mission of providing loan guarantees for SMEs who have an economically sound project but cannot secure sufficient bankable collateral.

Through its general guarantee scheme MGFSME partly covers the credit risk associated to loans extended to SMEs by 13 banks – partners of the Fund at a value up to BGN 100,000 and/or up to 50% of the principal of the loans. Up to now the Fund has supported over 630 SME projects by contributing to lending over BGN 117 million with a guarantee commitment of the Fund of about BGN 31 million.

In 2018 the Fund launched FISP – Financing Innovative Start-ups Program, which is aimed at facilitating the access of start-up and innovative enterprises to financial resources in connection with the realization and development of their business projects.

Year of creation individual entities or association	2002
Type of organization National Promotional Bank (NPB), National Promotional Institution (NPI), Private, Mutual, Mixed	NPI
Type of scheme guarantee or counter-guarantee	Guarantee
Product typology guarantee or counter-guarantee or co-guarantee	Guarantee
Ownership i.e. fully mutual, funded by SMEs, banking associations, fully public, fully private, private-public, mixed models	Fully public
Shareholder structure Private / Public (in %)	0/100
Legal form of single guarantee entity or association: i.e. fund, development bank, development agency, cooperative or mutual societies, bank, foundation, association, limited company, etc.	Fund
Structure / Network i.e. central scheme with regional offices, central scheme only, association network	Regional structure
Geographic coverage i.e. local, regional, national	Regional
Size of businesses supported i.e. large companies, SMEs, micro-enterprises, independent/self-employed	SMEs, Micro Enterprises
Supervision statute i.e. mono-product banking licenses, financial intermediary statute, non-supervised. For associations, please state statute of members	Financial Intermediary Status
Profit / Non-profit oriented dividends to public shareholders are not considered as profit orientation	Non-profit
Do you benefit from a counter-guarantee at local, regional or national level? Local level or Regional level or National level	No
Are you/your members financial intermediary for EU-programmes? CIP/COSME or Structural funds or Progress or RSI/RSFF Horizon 2020	No
Types of guarantee products provided by your organisation/your members	Loan default guarantees, Working capital loan guarantees, Leasing guarantees, Export guarantees
Other SME support instruments offered by your organisation/your members Subsidized loans or Mezzanine financing or Venture capital or Coaching or Mediation services	Coaching, Information and Consultation Services
Is the activity subject to state aid regulation?	No
Do you (your members) use..? De minimis or GBER or Regional guidelines or Notification	No
Do you (your members) dispose of an internal rating/scoring system?	No
Do your guarantees provide deponderation (capital relief) for member banks subject to capital requirements (Basel agreement)?	Yes
Do you (your members) benefit of a public counter-guarantee that allows deponderation (capital relief)?	No

Downloads

Financing Innovative Start-ups Program application/pdf | 1,41 MB