Strategies of the Development of Entrepreneurship and SME

• Project BG 2004/016-711.11.04 - Support for increasing the competitivenessof Bulgarian enterprisesRegulatory basis: Financial Memorandum (FM) under PHARE National Program, Bulgaria,2004. Project purpose: to increase the competitiveness of Bulgarian productive sector SMEs inrelation to their preparation for doing business in a highly competitive environment within theEU. The project includes three phases; funds for Phase I, total EUR 12 m, are negotiated withFinancial Memorandum 2004. Funds for Phase II (indicative EUR 10 m) are to be negotiatedwithin FM 2005 and for Phase III (indicative EUR 8 m) – within FM 2006, respectively. Totalproject value is EUR 30m.• Micro financing program of CRS/BulgariaThe program was launched in 1999 in four regions of the country. It is aimed atsupporting the development of small business in Bulgaria through the provision of fast andpermanent access to micro loans to entrepreneurs. The objective is expansion of their businessand increase of their incomes, at the same time relationship of partnership and mutualassistance is encouraged among them. So far, about 7 100 loans have been extended at a totalamount in excess of USD 4 m. It is implemented with the financial support of CRS (CatholicRelief Services) and USAID (US Agency for International Development).• Program of FAEL Foundation through the United Bulgarian Bank for SMEpromotionThe Swiss Government adopted in 1995 a program in support of small and mediumsizedbusinesses in Bulgaria. This program is implemented by the Swiss foundation FAEL. Thefoundation supports the development of independent small and medium-sized enterprises inthe field of processing and services, accompanying the production and marketing of agriculturaland forestry produce. Within the framework of this program and the agreement signedbetween the United Bulgarian Bank and the Swiss Development and Cooperation Agency(SDCA) a credit line was launched under a project in support of small and medium-sizedenterprises in the semi-mountainous regions of the Central Balkan range - Lovech, Gabrovoand Veliko Turnovo regions. It supports the development of independent small and mediumsizedenterprises in the area of processing of agricultural and forestry products and servicesaccompanying their production and marketing. The amount of the credit line is CHF 1 m for thefirst three years of the start of the project.• JOBS (Employment through business support)It is a project of the Ministry of Labor and Social Policy supported by UNDP. A network iscreated within the project of 40 business centers, including 10 business incubators around thecountry. In addition to business consultations, training and information JOBS project supportsthe setting up and strengthening of micro and small businesses by providing easy access tofinancial resources in the form of financial lease in two schemes – up to BGN 25 thousand andup to BGN 5 thousand for purchase of equipment for production and services. Over 13thousand jobs were opened under this project for 4 years.• Cooperative Union “Union of Popular Banks” was established in 1994. Thecooperative makes loans to its members.• EU financingWith the country's EU accession, EU funds and programs are increasingly beingdiscussed. Factors that impede SMEs involvement are numerous and of varied nature. First ofall, SMEs are impeded by the voluminous documentation required under EU projects. Inaddition, fears exist that procedures and not sufficiently transparent and this will additionallyhamper obtaining of funds under EU programs.A significant problem is the low level of awareness of SMEs of the possibilities providedby EU Structural Funds. The survey of Vitosha Research makes it clear that about 41 per cent38