The purpose of establishing a National Guarantee Fund is to ensure guarantees for SME’s. The implementation of a guarantee scheme will facilitate the access to financing by SME’s through compensating the lack of sufficient collateral when applying for loans, and will reduce the risk assumed by commercial banks in the country providing financing to SME’s.
Objectives for long term development of the NGF:
1. To support the SME’s in ensuring access to loans through:
a) improvement of the quality of the exposure of SME’s to commercial banks;
b) to provide additional collateral - guarantee for the implementation of their projects.
2. To achieve the objectives for development of the country within the frames of the economic policy approved by the Council of Ministers of the Republic of Bulgaria by:
- improving, promoting and developing the export potential and
- providing support to SME’s.
3. To ensure optimum and effective use of public funds.
The National Guarantee Fund (NGF) aims to achieve the following general characteristics:
- flexible and dynamic balance (leverage) between own funds and guarantee portfolio
-application of strict management principles
- following the principles of the market economy when choosing the projects, which will be supported
- reliable control and supervision
- maintaining contact between the NGF and its direct partners- the state, the banks and the SMEs
-the NGF should not cause any difficulties in the relations between the main parties, using its services- the banks and the SMEs
To achieve these objectives we plan on:
- joint analyses and identification of market gaps spotted earlier by associations and representatives of the business, the banks and the NGF;
- Search of attractive market niches with higher risk and respective need of diversification through guarantees;
- Optimizing the products of the NGF taking into consideration the interests of the SMEs as well as the partner-banks;
- Bringing into line the NGF fees with the ones of the banks in order to keep them attractive both for SMEs and the partner-banks;
- Development of clear and precise rules for the clients of the partner-banks using the NGF products;
- Defining of a strictly stipulated and friendly oriented to banks procedure for the guarantees’ approval;
- Periodical exchange of information between the NGF, the partner-banks and the representatives of the business, on status of the SMEs and the problems they face while obtaining financing.