40 000 Small Businesses in Bulgaria to Go Bankrupt by End-2012

Eleonora, Negulova, Chair of Bulgaria's National Association of Small and Medium Business (NASMB), has suggested that some 40 0000 registered SMEs, or 10% of the total, will go bankrupt by end-2012.

In a Thursday interview for the "Bulgaria On Air" TV station, Negulova claimed that managers were still failing to grasp the impact of the crisis and that it required a new approach.

She insisted that another major problem was intercompany indebtedness which had grown to BGN 100 B, according to recent data.

Negulova noted that the sectors experiencing serious difficulties were construction, the clothing industry, and the sectors which failed to implement technological upgrades.

Several days ago, the Bulgarian Construction Chamber (BCC) reported that some 27 000 small businesses had been closed and over 50 000 jobs lost in Q1, 2012.

According to data of the BCC, intercompany indebtedness amounted to BGN 104 B, while bad and restructured loans amounted to over 26% of the total of company loans by September 30 2012.

Meanwhile, a survey of Credit Insurance group Coface indicated that Bulgaria's bankruptcy rate was 0.12%.

However, Coface warned that the figures did not reflect the full picture in Bulgaria because the bankruptcy proceedings at Bulgarian courts were rather clumsy and the creditors often had no interest in starting them.

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