Lowering interest rates on loans will gulp of air the Bulgarian economy
According to Bulgarian National Bank Governor Ivan Iskrova, lowering interest rates on loans will increase and growth in demand for loans, which respectively affect the development of business and economics.
During the last year the crisis has forced banks to adopt more cautious policies. Part of the measures was to raise interest rates on loans that, for its part, led to the withdrawal of their money. On the other hand, because of the risk situation, drastically limited the demand for loans from both businesses and households. Companies moved their plans for “more recent future, but because of the inability to rely on family income, such loans have turned in exotics.
And now, according to the latest projections of the Bulgarian National Bank, it is believed that since the beginning of next year’s credit system will quicken. “Although the minimum, the amount of credit now stands at 4.4% and, thus, Bulgaria remains one of the states that support a certain amount of funding” – said the manager Bulgarian National Bank Ivan spark.
“We need to be able to submit their products to partners, because Bulgaria is very often simply placed in a group with other countries, the economic structure which is different from ours, and they do not have a financial system stability”, – explained Ivan spark.
He confirmed that the volume of bad loans is growing, and by the end of September they amounted to nearly 6% of bank lending, recalling, however, that are considered non-performing loans for which payments are overdue by more than 90 days, whereas in most of Europe the term ad credit “bad” is 180 days, and in some countries, even reaching a half years. Managing the Central Bank firmly believes that, despite the increase in problems with credit and rise in price as a deposit called a financial resource, the country’s banks continue to realize profits. Their capital adequacy to the end of September exceeded 17%.