Bulgarian Development Bank was established after the adoption of a special law by the Parliament of the Republic of Bulgaria in April 2008. The financial institution is a successor of Encouragement Bank. The mission of the Bulgarian Development Bank is to support the development of the Bulgarian economy by promoting export and supporting the implementation of the economic policy of the government in terms of micro, small and medium-sized enterprises.
For the performance of its tasks and objectives, Bulgarian Development Bank will establish a bank group of its own, which will comprise:
- Bulgarian Development Bank (BDB)
- National Guarantee Fund (NGF)
- Capital Investment Fund (CIF)
The activity of the Bulgarian Development Bank and its group is regulated by the Act on the Bulgarian Development Bank.
The objectives of the Bulgarian Development Bank are as follows:
- development of the common economic, export and technological potential of micro, small and medium-sized enterprises registered on the territory of the Republic of Bulgaria
- attracting and management of medium-term and long-term local and foreign resources and/or subsidies
- implementation of schemes for financing of public investments and projects for development of the national economy
- attracting of funds and management of projects of international financial and other institutions
The main activities of the Bulgarian Development Bank and its related structures are as follows:
1. Pre-export direct and indirect financing of Bulgarian micro, small and medium-sized enterprises geared toward their export transactions;
2. Guarantees through establishment of a National Guarantee Fund and support for launching and development of the activity of micro, small and medium-sized enterprises in the country;
3. Long term investment financing which the bank will perform directly or through the commercial banks in Bulgaria;
4. Risk capital financing, which will be geared towards small and medium-sized enterprises registered in Bulgaria with a proved potential for development, good financial condition and stable, but not dominant presence on the market;
5. Attracting and management of medium and long-term local and foreign resources and grants intended for economic development.
Sources of funding of the Bulgarian Development Bank are:
1. Loans and credit lines from international and domestic institutions
2. Development funds from international and domestic organizations, i.e. EU (structural funds)
3. Bond issues
4. Attracting corporate deposits
5. Special purpose funds for development of economic sectors and geographic regions
Principles of operation of the Bulgarian Development Bank:
- Transparency
- Efficiency
- Profitability
- Effectiveness
- Good practice
The Bulgarian Development Bank will also apply the principle of market compatibility and non-competitiveness with the other participants. This principle should be observed by implementing the requirement for “complementing” by performing activities and offering products that other market participants do not offer or offer within a very limited range.
