Bulgarian development bank will launch a new product for indirect financing to farmers. The on-lending program will be implemented through mutual agricultural credit cooperatives which will receive and distribute BDB’s lending. Currently there are 26 credit cooperatives in the country, financed mostly by international funds which they in turn provide to farmers. By financing the credit cooperatives, BDB will have the opportunity to improve the access to financial resources for hundreds of farmers and agricultural producers and their small farms in some underbanked and remote regions of the country.
The initial budget of the program is BGN 15,000,000. The maximum amount of investment and working capital loans for the cooperative’s members is BGN 50,000. The annual interest rate plus the margin should not exceed 8.5%. The total fees and commissions should not exceed 1%. For the working capital loans the maximum maturity is up to 18 months, for the investment loans – up to 42 months.
