"A key role in the country’s development": What is the future of Bulgarian Development Bank?

The Bulgarian Development Bank (BDB) is key to the country's economic growth. The path of development that the state-owned financial institution has taken is based on European good practices. The bank is developing in the direction of providing support and stability in achieving the goals set in public policies at the national and local levels.

This was the message expressed by Rosen Karadimov, the Acting Minister of Innovation and Growth and principal of the bank, during the international conference "Development banks - a tool for better use of public funds", held on the occasion of the 25th anniversary of the founding of BBR.

He described the institution as a "reliable and competent partner of the state" and emphasized that a focus will be placed on financing reindustrialization and sustainability in line with the adopted new strategy for the bank for the period 2024-2026. The minister also emphasized cooperation in terms of the development of industrial parks in Bulgaria in order to guarantee the attraction of new investors.

Karadimov also noted that the bank has improved its transparency and good governance and is a reliable and competent partner of the European Commission, the European Investment Bank (EIB) and the Bulgarian state in the implementation of specialized programs.

InvestEU

The executive director of BBR, Iliya Karanikolov, announced that the negotiations with the European Commission and the European Investment Bank on the InvestEU program have been finalized and the InvestEU program will open in a few days. He added that the proposals of commercial banks were also taken into account. The program is among the EU's main investment tools for economic recovery, environmental progress and employment in Europe. It is aimed at supporting growth after the COVID crisis and achieving the goals of building an ecological, digital and sustainable European economy.

Future partnerships

"Bridge between commercial banks and the state". This is how Petya Dimitrova, the chairman of the Association of Banks in Bulgaria and executive director of Post Bank, described the role of BBR.

She pointed out that the synergy between BBR and commercial banks is key to the financing of companies. Dimitrova pointed out that the banks would like to continue their cooperation with BBR along the lines of risk sharing and guarantees - "perhaps a greater deepening in sectors in which we, as commercial banks, are more limited". She gave as an example innovation and young startups with no prior history.

In these cases, the role of BBR would be essential".

Her position was also supported by Boyan Stefov, executive director of DSK Bank.

Most companies are young and lack business models, and if they don't have support from BBR, they are basically unbankable. These new “saplings” will get neglected and die. Here, the role of the banks is to work together to ensure that new businesses can come up and grow," he pointed out.

Banks also emphasized the need for faster decision-making and changes in joint programs when necessary.

Customers tell us every day that they want faster decision-making processes (for credit approval), and not to be referred to other institutions. We should be disbursing funds faster with less bureaucracy," added Peter Roebben, the executive director of the United Bulgarian Bank.

According to the CEO of UniCredit Bulbank, Tzvetanka Mintcheva, "the sooner we (cooperate to) do the programs together, the more successful they will be. Today we talk about guarantees and risk sharing, but the needs may change tomorrow."

You are knocking on an open door," said Iliya Karanikolov, BBR Executive Director, in response to these entreaties to future partnership plans between the banks.

Peter Roebben, the CEO of the United Bulgarian Bank, drew attention to the fact that the BBR’s role is of "substantial importance" in crises and gave the example of the COVID-19 pandemic. He highlighted the role of banks in development even in periods without crises, stressing their importance in the transformation of Bulgarian business.

“Europe today produces a smaller share of GDP than the US. The trends for Europe are not favorable, therefore we are at an important moment in the economic development of the continent. We have to make sure we don't kill our economy and industrial base. This is the main factor in the transition," he pointed out.

His opinion was confirmed by the director of the Bulgarian-American Credit Bank (BACB), Iliyan Georgiev.

Bulgaria can no longer be the country of cheap labor. We should have already had many automated businesses for a long time now, and this process should be done with the help of the BBR," said Georgiev.

Translated by Tzvetozar Vincent Iolov