Eligible SME sub-borrowers must:
- Have no more than 250 employees, excluding seasonal workers
- Have annual turnover of not greater than €50.000.000 or net assets of not greater than €43.000.000
- Not have any direct or indirect shareholder, either domestic or foreign based, that holds legally or beneficially more than 25% of its share capital and that has more than 250 employees, excluding seasonal workers
- Not have any Affiliate that has more than 250 employees
- Not be majority owned or controlled by the national or local government or government; agencies
- Not be adjudged bankrupt or insolvent, or ordered to wind up or liquidate its affairs, by a decree or order entered against it by a court
- Providing financial support at affordable terms to fast growing small and medium size-companies in manufacturing, food processing, transportation, construction, telecommunication and hi-tech sectors, market and social services.
- Increase export capacity.
- Promote job creation and revenue generation.
- Increase competitiveness of firms in the member countries.
- Promote intra-regional investment.
- Facilitate know-how and technology transfer.
- Mobilize external capital to the region.
- Facilitate networking.
- Improve financial sector ability to deal with and supply financing to SMEs.
- Credit Guarantee Funds
- Microfinance/SME Specialized Financial Institutions
- Venture Capital/Equity Investment Funds
- Credit Lines through Selected Financial Intermediaries
Credit Guarantee Funds
These are profit maximizing private sector ventures benefiting of financial support and technical assistance from donor institutions and governmental agencies. They provide maximum benefit when express genuine public private sector partnership (governments’ demonstrated commitment to the development of strong SME sector).
Microfinance-SME Specialized Financial Institutions
Microcredit organizations in BSTDB member countries need a combination of capacity-building, funding, policy development and performance-based objectives to develop into professionally managed, permanent and self-sustainable institutions.
Venture Capital-Equity Investment Funds
BSTDB makes equity investments in SMEs through specialized investement vehicles. Venture Capital/Equity Investment Funds, benefit of certain economies of scale especially in the form of: lower costs; more regional approach; increased synergies among the recipient companies, which result in increased regional co-operation.
Financial Leasing is an effective financing instrument in cases of companies with limited capital base and insufficient credit history. Leasing is an effective instrument to provide medium to long term financing to SMEs in places where there is in place a conducive regulatory environment. It is a useful instrument to replace medium to long term loans for purchases of equipment and technology, BSTDB has been providing credit lines to leasing companies for leasing of investment goods to SMEs, and may consider taking equity positions in leasing companies when deemed appropriate.
Credit Lines through Selected Financial Intermediaries
Credit lines have the purpose to provide selected banks with medium-term capital not available in the market and to encourage establishment of long term relationship between banks and SMEs.
Financing is provided in the form of loans (credit lines) through client commercial banks and leasing companies, incorporated in the respective member country with a large branch network and prior good quality experience in SME financing. The borrower will be the participating financial intermediary.
Sub-loans are provided by the intermediary to SMEs on commercial basis terms and their maturity cannot exceed the remaining time to maturity of the credit line.
Through an agreement between the European Investment Bank and the Black Sea Trade and Development Bank (BSTDB), the two development banks are jointly supporting small and medium sized businesses (SMEs) and small projects carried out by enterprises having less than 3 000 employees (MidCaps) in Bulgaria, Greece and Romania by providing access to an invaluable source of lower cost finance and flexible repayment schedules.
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