The loans of Bulgarians have doubled in recent years. In 2017, the average debt per person in the country was over 900 BGN. In comparison, in 2015 the amount was about 450 BGN.
This indicates Eurostat’s current data. In their view, only the Greeks are experiencing greater difficulties than us in the discharge of their debts.
At the end of last year, each third Bulgarian had unpaid accounts – overdue mortgage, rent, electricity, heating, leasing and others. In our southern neighbour, 48 percent of the people are experiencing difficulties with bills. Third and fourth places in this statistic take Cyprus and Croatia with 26 per cent borrowers with overdue loan payments.
Last year, 1.8 million people were in the column of borrowers. Delayed and non-performing payments at the end of 2017 were as follows: consumer loans – over BGN 800 million, and mortgages – nearly BGN 1 billion.
Fast credits are a key driver for new commitments and for the snowball effect of debt for consumers. Unfortunately, this trend will continue in this year, according to the Consumer Protection Committee’s forecasts. The reason for this is the most facilitated access for citizens wishing to receive money, through extremely aggressive advertising and the readiness of credit institutions to allocate funds to persons with bad credit history.
The organization is often refered by people who have taken money to buy a medium or even cheap class of mobile phone, tablet, computer or TV which, after payment of the loan, have proved to be far more expensive. Even in the streets, there are more and more frequent ads of lending up to BGN 5000 to people with bad credit history.
The bank loans taken by business and non-financial institutions amounted to BGN 55.048 billion (52.5 percent of GDP), with BGN 54.861 billion in April. The highest annual increase indicates the consumer loans – by 15 percent annually, which is over the growth marked in April of 14.4 per cent. At the end of May 2018, the residential loans amounted to BGN 9,830 billion and grew on an annual basis by 9.8 percent, while the annual increase in April was 9.3 percent.
One possible reason for the acceleration in recent months is that banks have focused on seasonal promotions in consumer credit. In the case of consumer loans, the lowering of the grant standards is observed. The reasons: competition and high liquidity in the banking sector, the improvement of the macroeconomic environment and household solvency, good expectations of the housing market and lower collateral risk.
