Beneficiary Eligibility Criteria for interest-free loans, supporting people deprived of the possibility to work due to COVID-19 pandemic

Further to Council of Ministers Decision 257/14.04.2019, Bulgarian Development Bank announces the mechanism, conditions and procedure for financing individuals under the Interest-Free Credit Guarantee Program adopted to assist people deprived of the opportunity to work due to the COVID-19 pandemic.

The program is one of the Bulgarian government’s anti-crisis measures aimed at protecting self-employed and employed persons during the emergency situation. It will support the individuals affected by the pandemic’s economic impact, who must meet the following conditions:

Persons with employment contract should:

• Have ceased performing paid labor and be on unpaid leave due to the pandemic;
• Be a party to a legal employment relationship during the last 6 months before taking unpaid leave;
• Not receive remuneration for other legal employment relationships;
• Have worked at least five business days in March, if this is the month in which they are put on unpaid leave.

Self-employed persons should:

• Have interrupted their self-employment activities and/or have suffered at least a 20% decline of their income for the first quarter of 2020 compared to the first quarter of 2019, as a result of the pandemic;
• Not receive remuneration for other legal employment relationships.

Applicants must have their social security contributions paid and be able to resume their activities (to return to the same job) upon termination of the unpaid leave.

The maximum loan amount stands at BGN 4,500, disbursed in full or in three tranches of BGN 1,500 each. If the loan is initially granted for a smaller amount, it can be annexed subsequently in order to reach the amount of BGN 4,500.

The loans are interest-free (with regular interest rate 0%) and the borrowers shall not be charged fees, commissions and penalties. Applicants shall not provide collateral under the loan.

The maximum repayment period is 5 years, with a grace period of minimum of 6 months and maximum of 24 months.

The loans shall be repaid in installments after the end of the grace period, and the amount and number of installments shall be determined by the commercial bank and the borrower. The commercial banks have the right to amend the agreed (with the clients) repayment schedule, yet within the maximum program deadlines. Every citizen is entitled to early repayment of his / her debt without fee / commission.

The loan program’s application period is open until 31.12.2020

Application documents to be presented before BDB’s partner bank:

• Request for financing (standard pre-approved form to be provided by the commercial bank);
• Valid identity document - ID card or passport;
• Person's registration document, if self-employed;
• Employer’s data along with signed employment contract (including an NSSI report extract proving current legal employment relationship for the last 6 months);
• A statement containing the following:
  - Declaration of discontinuation of activities for self-employed persons and/ or documents proving at least a 20% decline of their income for the first quarter of 2020 compared to the first quarter of 2019, as a result of the pandemic
  - Declaration that the person is on unpaid leave due to the pandemic, where the starting date of unpaid leave must be after 08.03.2020;
  - Declaration by the applicant about the (fully or partially) suspended activity of his/her employer, due to the pandemic;
  - Declaration that the person does not receive remuneration for his/her work under another legal relationship;
  - Declaration of the person's intention to return to the same job / resume the discontinued activity (for self-employed);
  - Declaration that the person’s (whether employed or self-employed) social security contributions are paid;
  - Declaration that, in addition to applying for the loan, the applicant does not take benefit from another measure in connection with the pandemic, provided to individuals by the State.

BDB will announce its partner banks under the program after April 15, 2020.