Seven percent of small enterprises have received European funds to deal with the covid crisis
In a relatively calm phase of the Covid-19 pandemic, we are taking a look at the past two years of active financial support to deal with the impact of the pandemic and the restrictive measures on businesses. This text examines the distribution of this targeted financing in different regions of the country, by industry, and according to the size of the recipient companies.
The main source of data is the website of "ISUN 2020" - the management and monitoring system for European funds, which was also used for the distribution of activities related to COVID. The system includes the amounts paid under various programs, mainly to support micro, small, and medium-sized enterprises that have been affected by the crisis and restrictions, as well as the "Warm Lunch in Pandemic Conditions" initiative, where funding is directed straight to municipalities that provide the service. The key indicators we extract from the available information are two - total funds absorbed since the beginning of the crisis per municipality and funds absorbed per capita in the municipality.
IME published a similar comment last summer, but since then, expenditures have been much larger - while by the end of June last year, their total amount was BGN 267 million for the whole country, after a year, it had already risen to almost BGN 652 million, distributed among 30,485 projects. The aid received in the capital has increased by BGN 100 million and now amounts to a total of over BGN 186 million, or 28% of all distributed funds. Unsurprising, given the high concentration of economic activity in Sofia.
After Sofia, mainly large regional centers are ranked, and similar to last year, the top five include Varna (BGN 47 million), Plovdiv (BGN 46 million), Burgas (BGN 27 million), and Ruse (BGN 19 million). Among the non-regional cities, the largest amounts have been received by Nessebar (BGN 9 million, 11th place) and Petrich (BGN 5.6 million, 19th place) - tourism centers, heavily affected by the pandemic. 70% of the disbursed amounts are directed to the top twenty municipalities, where half of Bulgaria's population lives. This concentration of funds is normal since they represent the main economic centers of the country. Companies and local administrations in only three municipalities - Makresh, Boboshevo, and Treklyano - have not benefited from any of the programs.
Interactive version of the map
If we look at a comparison based on the average amount paid per person, smaller municipalities take the lead. The top five municipalities are similar to those from last year, including Nessebar with BGN 293 per person, Rila (BGN 202 per person), Bansko (BGN 182 per person), Primorsko (BGN 174 per person), and Kavarna (BGN 157 per person). Once again, these municipalities are leading due to their economies being heavily reliant on tourism. The high position maintained by the Rila municipality, even after the new wave of funding in the last year, is due to the small population combined with several companies that have absorbed BGN 50,000 or more.
Interactive version of the map
The geographical distribution of the aid does not provide a complete picture of how these funds are being utilized. Reviewing individual projects allows for an analysis of the candidates, the amounts received, and the programs involved. The Ministry of Tourism has actually received the highest amount of funds, absorbing BGN 2 million for support to tour operators and travel agents. The next 82 beneficiaries are municipalities, and the purpose of the funds is the "Hot Lunch in the Conditions of the COVID-19 Pandemic" program, a social program for home care targeted at the most impoverished. The values range from BGN 150,000 to nearly BGN 2 million. A total of BGN 38.7 million has been allocated for the entire initiative, distributed among 181 projects.
Excluding this specific program, there are three more significant measures that cover almost all submitted funding applications. One of them is the "Support for Medium-sized Enterprises to Overcome the Economic Consequences of the COVID-19 Pandemic" program, where the amount of assistance varies from BGN 30,000 to BGN 150,000 (more commonly known as the "30-150" measure). A total of 1,542 companies have applied for assistance under this measure, with the majority (1,066) receiving the maximum possible amount. The total aid distributed under this measure amounts to BGN 210 million.
There were 4,303 applications under the "Support for Small Enterprises with a Turnover over BGN 500,000 to Overcome the Economic Consequences of the COVID-19 Pandemic" program, with 4,156 companies receiving assistance of BGN 50,000, while the remaining companies did not receive any funds. The total amount of aid distributed under this program is BGN 207 million.
However, the most comprehensive program is the "Overcoming the Lack of Funds and Liquidity Shortages Resulting from the COVID-19 Epidemic" program, also known as "3-10," as it provides assistance ranging from BGN 3,000 to BGN 10,000 for micro and small enterprises. A total of 22,912 companies have applied under this program, with a total of BGN 185 million distributed, or an average of BGN 8,115 per applicant. Over thirteen thousand companies received the maximum amount of assistance, while only 44 companies did not receive any funds. In other words, almost all companies that requested support during the pandemic received it.
It is noteworthy that the maximum allowable amount is most frequently disbursed under all three measures. This, together with the fact that the applying companies represent approximately 35% of the average and 7% of micro and small non-financial enterprises, may give the impression that the funds for addressing the consequences of the pandemic are directed toward a relatively small group of companies that have maximized their benefits. However, this does not necessarily imply weak coverage of the measures, considering that there is no analysis of how many companies actually needed such assistance. Recall that the restrictive measures disproportionately affected economic activities. As expected, there is a concentration of funds at the regional level, primarily benefiting companies in the capital and major cities. Furthermore, in terms of company size, medium-sized enterprises and small enterprises with a turnover exceeding BGN 500,000 received a total of over BGN 400 million through 5,845 applications, which is more than twice the amount allocated under the "3-10" measure, which received applications from nearly 23,000 companies.
