The Ministry of Tourism and the Bulgarian Development Bank signed a memorandum of cooperation in support of the hotel and restaurant industry

Minister Prodanov: The program “Support for Tourism” will provide an opportunity to improve the liquidity of the companies so that they are more competitive and work more calmly

The Ministry of Tourism and the Bulgarian Development Bank have signed a memorandum of cooperation, which will provide direct financing to micro, small and medium-sized companies in the hotel and restaurant industry affected by the pandemic. The signatures were affixed by the Minister of Tourism Hristo Prodanov and the executive directors of BDB Vladimir Georgiev and Zhivko Todorov. The Minister of Innovation and Growth Daniel Lorer also attended the event.

To provide greater access to liquidity in difficult situations, BDB is creating a new program “Support for Tourism”, which will help hoteliers and restaurateurs, including start-ups, to meet their needs, manage overdue debts and alleviate their current payments to financial institutions and suppliers.

The volume of the program is 60 million levs, and the bank will offer two products – “Liquid aid for restaurateurs” and “Liquid aid for hoteliers”. The advantage of the new terms is that they provide access to financing for companies overdue for up to 90 days according to the CCR (up to 5% of the total wallet) and up to 60 days (up to 45% of the total wallet), refinancing their liabilities. Refinanced loans can be rescheduled for up to 2 years, easing the burden of their repayments.

This new program is of direct benefit to about 25,000 micro-, small and medium-sized companies in the sector, with grace periods of 18 months for hoteliers and 12 for restaurateurs. The projected interest rates will be 2.82%, according to the profiles of borrowers.

Minister Prodanov said that tourism was the worst affected sector of the COVID-19 crisis and that is why many economic sectors found themselves in an extremely difficult situation. “Commercial banks, given their difficult situation, distrust the representatives of the tourism business. For this reason, during the coalition negotiations with the coalition partners, we decided to create a special product for the tourism business with BDB,” he said. According to him, the product will provide an opportunity to improve the liquidity of the companies so that they are more competitive and work more smoothly.

On his part, Minister Lorer said that the Bulgarian Development Bank will continue to work with Bulgarian business to support it where it is really needed.

BDB’s Executive Director Vladimir Georgiev clarified that the main problem in tourism is the lack of working capital and that is where the bank will try to help. “This is where the role of the BDB is to intervene and support the sector, which is going beyond the normal lending in other banks,” he concluded.

At the end of the meeting, Minister Prodanov thanked the BDB leadership for the constructive talks and for the fact that the pre-election promises are being fulfilled one by one.