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Nearly 30% decline in non-performing quick loans in one year

Bad quick loans in Bulgaria continue to decline, according to the Bulgarian National Bank (BNB) data for the second quarter of 2018.

At the end of June 2018, non-performing fast loans amounted to BGN 278 million – nearly 30% decline per year. Thus, bad loans already account for 11.4% of the portfolio of the companies specialized in quick loans. NPLs in the segment have declined steadily over the past three and a half years. Only between March and June 2018 they decreased by 18.9% or by BGN 64.8 million.

 

One of the main reasons for the decline of the bad credits is that companies sell their overdue receivables much earlier and more frequently to specialized debt management and collection companies. For the first time in three years there has been a decline in the volume of non-banking loans. The reason for that is both in the higher base in the segment after several years of growth and in the more aggressive behavior of the banks that have started to lend more actively. Over the past year, more and more banks began offering similar to fast loans instruments under attractive conditions.

 

The volume of loans granted declined between March and June 2018. At the end of the second quarter, the loan portfolio of specialized companies reached BGN 2.429 billion (2.4% of GDP) compared to a year earlier, when it was BGN 2.655 billion (2.7% of GDP). The annual decline is 8.5% (BGN 225.7 million), and on a quarterly basis – by 14.7% (BGN 418.4 million), shows the central bank data.