Loan

The Central Bank has announced measures that are designed to lower interest rates on commercial loans and strengthen the monetary transmission mechanism.

The average amount of debts that households cannot service is about BGN 2200, announced one of the large debt collection companies in Bulgaria. The biggest debts are piled up in major cities and in the northwestern Bulgaria.

The second lockdown, imposed in the country just a month ago resulted in a new decrease in debt payments to banks, telecommunications companies and fast loans.

The state promises to subsidize the installments of financially challenged households for repaying their dues to their creditors by between 20 and 50 percent, whether they reach a settlement in court or via the out-of-court mechanisms to protect their main residence from repossession.

Greek banks are adopting a tougher stance toward entrepreneurs who do not service their obligations, by moving ahead with the direct sale of major enterprises' bad loans to funds.

The sales planned will not only concern large portfolio transfers but also individual loan sales, even those of small or medium-sized companies.

Local banks have another instrument at their disposal in their efforts to tackle the issue of nonperforming loans, and particularly the mortgages that form the bulk of the problem for Greek households.

Banks are preparing to make joint proposals for the settlement of bad mortgages (with write-offs of up to 50 percent) and bad consumer loans (up to 90 percent) to almost 157,000 debtors who have filed for protection under the provisions of the so-called Katseli Law.

Domestic banks intend to settle the almost 170,000 pending debt cases that have stalled in the country's courts in a manner that is likely to lead to generous haircuts. They plan to do so by using judicial decisions already issued under the law that protects debtors' main residences as a guide.

Banks are putting an end to the informal immunity granted to strategic defaulters, switching their tactics to the more active pursuit of dues. Tackling the problem more efficiently could fetch hundreds of million of euros in liquidity.

The finances of households and corporations in Greece, which have deteriorated over the last 12 months, and the inefficiency of the banks' debt settlement strategies are reflected in the fact that about four in every 10 loans that had already been restructured are now in need of a new payment plan, according to a review of the country's credit sector published yesterday by the Bank of Greece.

Turks will likely witness an extension of loan terms after a series of interest rate cuts by almost all banks, according to a leading banker, who noted that lenders would continue to support the economy.