The scope of BDB guarantee program in support of individuals is expanded

The Bulgarian Development Bank has prepared changes to the Program for guaranteeing interest-free loans to protect people deprived of the opportunity to work due to the COVID-19 pandemic.

The Decision of the Council of Ministers of 10 December 2020 increased the ceiling for interest-free loans guaranteed by BDB for one individual from BGN 4 500 to BGN 6 900. The deadline for applying was extended until 30 June 2021 or until the expiry of the guarantee limits of the partnering commercial banks under the Program.

The change was required due to the continuing pandemic situation in the country.

The government has instructed Bulgarian Development Bank to unconditionally guarantee all loans granted by commercial banks in compliance with the new conditions. This also applies when the loan agreements or the additional agreements to them were signed before the update of the financial agreements between Bulgarian Development Bank and the commercial banks in accordance with the amendments to the Program.

The aim is help as soon as possible those who are again on forced unpaid leave and the self-employed with interrupted activity or a drop in income at the end of the year due to the second wave of the pandemic.

The adopted changes provide an opportunity to support more people, including those who were once on unpaid leave and were subsequently left without an employment contract and were directed to employment offices.

The maximum repayment period is 5 years, with a minimum of 6 months and a maximum of 24 months grace period. The loans are exempt from fees, commissions and penalties.

The Government Decision introduces changes for self-employed persons engaged in freelance or craft by registration and farmers, particularly affected by the pandemic. They should submit certified copies of the accounting documents, tax returns or other documents issued by them that establish a decrease in income for the respective period. A declaration according to a sample form of BDB is also required, stating that the data and documents provided are exhaustive with regard to the decrease in income. If these documents are not applicable, it is sufficient for the person to submit a declaration according to a sample form of BDB that he or she has suffered at least 20% decrease in income over the periods under review compared to those before the pandemic.

BDB Program also provides more opportunities to include seasonal workers and young people who started working in 2020. It is sufficient for the person to have a total of 3 months of employment relationship in the period between January 1, 2020 and the date of his or her application for a loan. For this three-month period, it is necessary to have declared and/ or paid social security contributions by the employer, in case they were due.

For self-employed persons, it is necessary to have declared or paid the social security contributions due after 1 January 2020 inclusive, only for the period in which they have carried out activity.

The Bulgarian Development Bank does not consider loan applications, but includes loans already approved by commercial banks in the issued portfolio guarantee.

Partners in the Program are 12 commercial banks, 10 of which continue to accept applications for interest-free loans. These are Allianz Bank Bulgaria, DSK Bank, Investbank, First Investment Bank, Commercial Bank D, UniCredit Bulbank, United Bulgarian Bank, Eurobank Bulgaria, Raiffeisenbank and Central Cooperative Bank.

Municipal Bank and International Asset Bank have exhausted the guarantee limit.

Additional agreements are expected to be signed with each of the partnering banks.