Overdue loans from the non-banking financial institutions are decreasing again in absolute value and their share of portfolios is now below 7%, showing BNB data to December 2022. The growth of the credit portfolio in the sector has contributed to the shrinking of their share, while at the same time they are at the lowest level since March 2022 – just over BGN 300 million. The peak in the non-performing loans (NPL) was in June 2022 (see the chart).
Fast loans granted continue to increase, and those with the term up to 1 year are still dominating the market. Decreases in the volume are noted only for the loans with terms between 1 and 5 years.
The households are stepping ahead as clients of non-banking companies – they took out loans for more than BGN 3.11 million, mainly consumer loans. Non-banking financing became attractive also for corporates, although their share in portfolios is small. For the first time since June 2021 mortgage fast loans noted a decrease. However, they are a small part of all loans and their move doesn’t have much impact on the market.
In recent years the lowest level of the NPL volume was in late 2019 to early 2020. Subsequently the economic contraction and pandemic- based crises led to noticeable rise in fast NPL. But the increase in the new granted loans led to decrease of their share in the portfolios. The pandemic has boosted demand for non-banking financial services, alongside record growth, which also noted bank lending.
Non-banking companies granted several types of loans. The most common are quick loans for individual clients thrоugh a procedure, faster and easier than bank lending. Also popular are loans for deferred purchase of various products, most often technical goods. Non-banking companies for corporate lending are a smaller part of the market.