Bulgaria Mulls Capping Interest Rates on Quick Loans at 30%

Business » FINANCE | January 3, 2014, Friday // 17:24
Bulgaria: Bulgaria Mulls Capping Interest Rates on Quick Loans at 30% Photo by Sofia Photo Agency

Bulgaria's government plans to tighten the regulatory regime for companies offering quick loans.

The Bulgarian Socialist Party (BSP) plans to boost consumer protection through changes to the Credit Institutions Act, according to reports of Nova TV.

Under one proposal, interest rates on quick loans will be capped at 30%.

Rumen Gechev, socialist MP and Deputy Chair of the parliamentary economic committee, reminded that it often happened that debtors were asked to pay back several thousand leva to settle a loan of BGN 300 M.

Another proposal is to set minimum equity capital at 20% for companies offering quick loans.

According to reports of Pressa daily, a total of 117 companies specializing in providing loans have been registered with the Bulgarian National Bank (BNB).  They are not subject to a licensing regime but are required to maintain minimum equity of BGN 250 000.

Under another proposal of BSP, the Consumer Loan Act, which now applies to sums of BGN 400 to BGN 147 00, is to include loans from BGN 1 to BGN 399.

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Tags: Bulgarian National Bank, fast loan companies, consumer loans, Credit Institutions Act, Bulgarian Socialist Party, BSP, Rumen Gechev, Socialist-led government
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