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Delayed Government payments widen Bulgaria’s leasing defaults

Tue, Nov 17 2009 10:25 CET

byDnevnik.bg

1885 Views 1 Comment
Delayed Government payments widen Bulgaria’s leasing defaults

Photo: Julia Lazarova

Non-performing leasing contracts almost doubled to 688.3 million leva at the end of September, compared to 373.8 million leva at the end of June 2009, according to figures released by the the Bulgarian National Bank.

Defaults accounted for 13.1 per cent of the total 5.34 billion leva.

Speeding up Government payments to companies was one of the 12 steps aimed at improving business climate mapped out by Bulgarian banks at a recent meeting with Finance Minister Simeon Dyankov.

Reining in expenditure combined with a boost in revenue were identified by the Cabinet as key factors for balancing the Budget in October.

Teodor Marinov, co-chairman of the Bulgarian Association for Leasing (BAL), told Dnevnik leasing defaults were set to peak in the final quarter of 2009 and the first quarter of 2010.

"We’re now seeing a second way of overdue leasing that we’ll overcome by the second quarter of 2010," he said.

His view was echoed by Plamen Pavlov, executive director of EFG Leasing, who predicted leasing defaults would continue to soar before peaking at the beginning of 2010.

The construction sector and related industries have seen the bulk of the defaults, mostly from corporate customers. According to BAL estimates, roughly 20 per cent of the leasing contracts in the construction industry are non-performing. The share of non-performing leasing among physical entities is less than five per cent.

Source: Dnevnik

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Comments

Anonymous peter Wed, Nov 18 2009 15:40 CET
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Its very confusing using the word leasing. I believe in Bulgaria leasing is just another word for credit. Leasing in English means something completely different. Can someone enlighten me please and advise on correct useage for English speaking news articles. Thanks


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