Non-Performing Loans to Reach 20%, Bulgaria Bank System Stable

Business » FINANCE | October 14, 2009, Wednesday // 20:25
Bulgaria Non-Performing Loans to Reach 20%, Bulgaria Bank System Stable: Non-Performing Loans to Reach 20%, Bulgaria Bank System Stable “The banks and the clients are trying to find solutions. Only when the client have no other choice, the bank proceed to other measures”, Hampartsumyan said. Photo by BGNES

The amount of non-performing loans in Bulgaria may reach 20% of the total number of loans, but will not endanger the bank system.

Dr. Emiliya Chengelova from the Bulgarian Academy of Sciences cited Wednesday a research done among people with low and average incomes.

In her words, most of the people in this social group seek financial support from their friends to cover their loans.

However, the banks insist that the non-performing credit loans increase is expected consequence from the global economic crisis, and the bank system is not endangered.

Every fourth bad credit loan amounts between BGN 5 000 and BGN 10 000, the research presented by Dr. Chengelova shows. These are mainly customers credit loans for an average period of 3 years.

“People took these money to buy food, clothes, for school, for current expenses. Nearly two thirds of these credit loans are in the final stage of their returning”, Chengelova cited the results.

Most of the people, though do not now what to do when they cant pay back their loans. Some of them stop paying at all, and other make huge delays, she added. They are not able to manage their debt.

According to the banker, Levon Hampartsumyan, the banks are always ready to negotiate the credit loans conditions so they can get their money back.

“The banks and the clients are trying to find solutions. Only when the client have no other choice, the bank proceed to other measures”, he said.

In cases of non-performing credit loans the banks have already made some profit, Hampartsumyan explained. In his words, the banks system is stable.

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Tags: non-performing loans, Levon Hampartsumyan, bank system
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