Bulgarian National Bank announces boom in bad loans – Novinite.com
Against the background of rapid flooding of silver announcements the public domain, the National Bank of Bulgaria reported a boom in unserved quick loans.
Through at the end of December 2020, the value of defaulted loans granted by companies specializing in credit amounts to BGN 297.4 million. This is an increase of 57.8% (109.0 million BGN) compared to the end of December 2019 and of 33.6% Following (74.9 million BGN) compared to the end of September 2020.
Over a period of one year, the total value of quick loans reached BGN 2.9 billion to 3.07 billion BGN, an increase of 5.86 percent.
The increase, according to experts, is due to consumers who consider that they have to pay late interest during the state of emergency, that is, the companies violate art. 6 of the law on measures and actions during a state of emergency decreed by a decision of the National Assembly.
“Consumers are also increasingly seeking the Consumer Protection Commission to obtain information on their rights and charge default interest during the state of emergency,” added the regulator.
It is important to remember that in the last months of 2020, parliament repealed the controversial amendment to the Consumer Credit Law concerning late fees on overdue fast loans which was contested by the president.
According to the texts, the costs of a credit agreement with a financial institution cannot be greater than twice the amount of the principal and, by fulfilling this condition, they are not considered excessive. In other words, it has been approvedD that the costs that the consumer will have to pay in the event of non-compliance with its obligations under a consumer credit contract by a financial institution can reach double the amount of the principal.
For banks, for the moment, the bad debt situation is reversed.