Non-performing fast loans (NPL) have increased their absolute value by 14% year-to-year up to BGN 404.6 million, shows the Bulgarian National Bank’s data in the third quarter of the year. Growth in the new granted loans leads to a decrease in the share of overdue debt in the total portfolio – from 6.7% in September 2023 to 6.4% in the same period of 2024.
On a quarterly basis there is also a decrease in both share and absolute value. In March 2024 overdue non-banking credits reached nearly BGN 421 million or 7.4% of the portfolio. Only three months later they decreased with more than BGN 16.5 million, which is equivalent to 6.4% of total portfolio.
For the past 12 months to September 2024, non-banking loans have increased by over 20% or more than BGN 1 billion in an absolute value to a total of BGN 6.3 billion. An increasingly large share of them are consumer loans for households (see the chart). The data covers both classic “fast money” companies and those specializing in commodity loans for installment purchases. The statistics also include companies that are part of banking groups and through which they granted consumer loans. That’s why the growth of non-banking lending in many periods is closely linked to that of mortgages – if households buy homes with a mortgage, they often take out a consumer loan for additional financing and renovations.
Among other reasons for the growth of non-bank lending, according to experts, is the inflation, accumulated in recent years. On the one hand, money demand due to devaluation leads to an increase in the nominal value of loans granted. On the other hand, reduced purchasing power pushes more people to quick loans. It is noticeable that the growth of fast loans granted for business purposes continues, although weaker than for households. There is also a fairly serious increase in loans secured by mortgages, but their share in the total non-bank loan portfolio is insignificant.
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