Finance Interest rates on business loans fell below 4%

Banks in Bulgaria are already offering business loans at lower interest rates at 4%. This shows data on new and renegotiated BNB loans at the end of June this year

BGN loans are granted on average at an interest rate of 3.8%, while those in EUR – an increase of 3.1%. However, not everyone can afford much cheaper credit because most euro loans are in larger amounts. In the first six months of the year, more than 85% of corporate loans denominated in euros were worth more than one million euros. However, the 15% who take business loans worth less than 1 million euros also pay 3.1% for them. For comparison, for loans to companies traded in BGN, the ratio between loans below 1 million euros and above 1 million euros is about 45:55. It should be kept in mind that the levels are averaged and often a one-time effect can have an upward or downward impact – for example, a loan is repaid or renegotiated in one direction only

Loans the most expensive in Bulgarian lev are set interest for the first at least 5 years of the repayment period. At the end of June, the interest rate on them was on average 9%. According to the NBB, however, these loans represent less than 1% of loans approved.

For the first six months of the year, banks granted $ 5.6 billion in new business loans (including old ones). That's 6% more for the same period last year. Of these, BGN 3.9 billion was allocated in euros, about 1.7 billion leva – in Bulgarian currency and just under 30 million leva – in US dollars. Loans in EUR worth more than one million euros are increasing the fastest – they increase by 30% per year and reach BGN 2.3 billion

1.6 billion leva Loans Housing

The housing loan boom is gradually weakening. If, in the middle of last year, new and renegotiated mortgage loans had increased by nearly 60% on an annual basis, this year they continued to rise, but already "only" by 12%. In the first six months of 2018, BGN 1.6 billion of home loans were approved, more than 90% of which were allocated in Bulgarian currency. By way of comparison, in new mortgages denominated in euros, there was a 34% decrease on an annual basis, which is explained by the higher interest rate at which they are traded.

in Bulgarian levs. In June, consumer loans cost 8.4%, while in euros they were 3.9%. However, only 1% of this type of consumption is granted in a currency different from the Bulgarian currency. In the first six months, banks approved 2.3 billion BGN of these loans, up 16 percent from the same period last year. New loans in the first half of 2017 increased by 30%