For the first time since the start of the global economic deterioration, Bulgaria's corporate loans growth decelerated, shedding 0.4 per cent or 129.6 million leva in March 2009 compared with the previous month, showed the central bank data.

Loans to companies added up to 30.404 billion leva at end-March 2009, accounting for 42.4 per cent of the country's gross domestic product.

For comparison, business credits grew by 3.3 per cent on the month in March 2008 and by 5.6 per cent in the same month of 2007.

Annual growth pace slowed down to 24.4 per cent at end-March 2009 from 33.1 per cent in end-2008 and from a whopping 71.5 per cent in end-2007.

Corporate loans followed a steady rise until June 2008 when the trend reversed due to the dried-up credit market. Companies put investment projects on the back-burner over the market uncertainty amidst the crisis and banks, in turn, grew tougher on clients putting under close scrutiny applicants' creditworthiness. Bankers said reliable projects and firms are as scarce as hen's teeth at the moment. Apart from watching closer compliance with already existing requirements, banks now require bigger co-funding from applicants.

Consumer loans stayed in contraction territory for a fifth consecutive month in March, falling by 1.5 million leva or by 0.02 per cent from February. However, consumer loans shrank by the smallest margin in March compared to the previous four months. They totalled 7.215 billion leva at the end of the first quarter of 2009, rising by 17.5 per cent from March 2008.

Housing mortgage loans defied the downtrend adding 2.9 per cent in March 2009. Mortgages also registered the highest annual growth of 32.8 per cent to 7.975 billion leva.

Source: Dnevnik.bg