JOBS Project Overview

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JOBS Project Overview

• Joint project of the Ministry of Labor and Social
  Policy (MLSP) and UNDP
• Aims at supporting micro and small business
  development in order to create long-term
  sustainable jobs
• Established a network of 40 business centers (BC)
  and 10 business incubators (BI) across Bulgaria
• BCs/BIs are local NGOs and provide an integrated
  package of non-financial and financial business
  support services
• Operates a Financial Leasing Scheme

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Financial Leasing Scheme Overview

• Designed by UNDP on the basis of a pilot
  microfinance project in Bulgaria
• Targeted at start-ups, micro and small
  enterprises without access to bank financing
• Managed locally by the business centers
• Utilized for purchase of productive machinery and
  equipment leased to local companies by the BCs
• Targets regions with long-term unemployment
• Total fund of 5.150 million

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Why choose leasing?

• Solves the main problem faced by the target
  group lack of collateral. The leased asset
  serves as the only collateral required
• Lowers the risk of misuse of funds no cash
  provided
• Financially more secure the BC keeps ownership
  of the equipment until the full repayment of the
  lease
• Allows the BC to legally manage the fund under
  the existing Bulgarian legislation

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Financial Leasing Scheme Terms for Existing Micro
and Small Companies

• Repayment period up to 36 months
• Grace period up to 6 months
• Equal monthly installments
• Market interest rate national base interest
  rate plus 10 percentage points
• Maximum amount financed 15,000
• Mandatory client contribution minimum 20

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Financial Leasing Scheme Terms for Unemployed
Start with Leasing

• Repayment period up to 48 months
• Grace period up to 6 months
• Equal monthly installments
• Market interest rate national base interest
  rate plus 10 percentage points
• Maximum amount financed 3,000
• Mandatory client contribution minimum 10

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Client Eligibility Criteria

• The business must be registered and/or operate in
  the BC region
• Only micro and small companies are eligible
• Less than 600,000 annual revenues from sales
• Less than 500,000 fixed assets
• Less than 50 employees at the time of application
• Only production/service companies are eligible
• The company must create new long-term jobs after
  accessing the scheme

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Eligible Assets under the Scheme

• Machinery and equipment for production or
  provision of services
• No leases allowed for consumer use
• The candidate must present three offers from
  suppliers about the requested machinery/equipment
• Purchase of second-hand equipment allowed

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Application Process

• Mandatory training in business planning provided
  by the BC
• Preparation of business plan for start-up
  businesses and financial analysis of existing
  companies
• Review of application by local leasing committee
  composed of key stakeholders municipality,
  labour office, bank, business representative
• Final approval by JOBS Project financial leasing
  experts

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Lease Monitoring and Evaluation

• Monthly data collection and analysis to measure
  the performance of the FLS
• Monthly visits during the first three months
  after disbursement of the lease
• Quarterly visits after the first three months of
  the lease
• External in-depth evaluations to assess FLS
  market relevance and effectiveness and to
  validate results

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Financial Leasing Scheme Results

• 4.96 million disbursed in leases
• 847 micro and small companies served sewing and
  wood-processing companies, food producers,
  farmers, service companies
• 27 of clients are start-up businesses
• Over 2,650 jobs created (42 for women)
• Portfolio at risk (over 30 days past due) 2,98

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Key Success Factors

• The scheme is set up and operated with the close
  involvement of key community actors, ensuring
  local ownership, accountability and transparency
• The FLS product is designed in such a way as to
  minimize the risk of misuse of funds and increase
  financial security the NGO keeps ownership of
  the equipment until the full repayment of the
  lease
• Human resource development and ongoing capacity
  building at all FLS levels
• Strict delinquency control by regularly
  monitoring lease utilization

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Lessons Learned

• Continuous work with clients is crucial in order
  to build their capacity and to integrate feedback
  into improved FLS service
• The leasing scheme leads to better impact if
  combined with non-financial business support
  services
• Close partnership between BCs and local banks is
  essential for meeting the needs of financing of
  the local business community

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JOBS Project Contacts

• tel. [phone] / 174
• fax [phone]
• e-mail office_at_jobs-bg.org
• address Bulgaria, Sofia 1784
• 7th km Tsarigradsko Chaussee Blvd.
• www.jobs-bg.org