Problem addressed

Bulgaria is a country with just few attempts into social finance – due to early stage of maturity and development of both social entrepreneurs and impact investors. The past instruments only included SE as potential beneficiaries but lacked applicants with strong projects. SE in the country are mostly relying on grants support. 
Lack of access to finance is the most common challenge to Bulgarian SE.
At the same time the private investors, Angels and VCs do not have deep knowledge and understanding in the area of impact investing. Investors rarely turn their eyes on SEs and still there is low understanding how SEs are constructed and working. There is little documented evidence that may be said on the investors’ attitudes and on the factors which will motivate their greater involvement

Innovative solution

These outline the need for simultaneous actions and hand-in-hand approach in design and implementation of project elements on the levels:
1. To increase capacities of both social entrepreneurs and existent and potential impact investors.
2. To design non-financial and financial components which correlate and work together
3. To consider both public and private sources of funding for the social finance instruments
This will be done for the first time in Bulgaria. The partnership of the Consortium members is an unique collaboration of: a Bulgarian capacity building organisation for non-profits and social entrepreneurs (BCause Foundation); a Bulgarian microfinancing institution (SIS Credit), the organisation responsible for the structuring and management of financial instruments using public funds from the EU and national co-financing (Fund manager of Financial instruments in Bulgaria - FMFIB) and four leaders in Europe’s finance, social finance and entrepreneurship ecosystem: the international umbrella Microfinance Centre, the French leading organisation in investment readiness programmes Pulse SOS, the Italian investor Banca Etica and IBA – the Impact Business Angels Network in France.

Key results and benefits

The EPSI methodology is holistic and includes (i) analysis, (ii) co-design, transnational peer learning and training activities; (iii) designing, prototyping, testing novel approaches in financing SEs, including: designing financial instrument and investment readiness programme. The financial instrument is combining public and private funding, as well as non-financial support; prototyping financial product with the available resources of SIS Credit and testing it; launching a Bulgarian Impact Business Angels network and (iv) wide dissemination and awareness raising

Potential for mainstreaming

The project has the potential to trigger tangible change, in terms of improving the business support ecosystems, motivating new actors to take part in the SE field and increasing the cooperation of private and public investors, via networks of international partners. EPSI is looking to help social entrepreneurs with high potential to work on their impact evaluation skills and enhance their democratic management in terms of allowing more transparency and participatory engagement of important stakeholders like beneficiaries and employees. This will have a lasting effect on value driven start-ups and support understanding and alignment with the third axis of EU definition on social enterprise which speaks about accountable management.