Social Inclusion through Microenterprise Development
Elgar original reference
Chapter 4: The Microcredit Sector in Bulgaria
Kostadin Munev* 1 National context After a long and challenging period of reform and transition, Bulgaria opened a new chapter on 1 January 2007 when the country became, together with Romania, the most recent new members of the European Union (EU). The efforts of national governments, the citizens and the business world, supported by generous international assistance and guidance during the most difficult phases of transition, have led Bulgaria to achieve fiscal stability, sound economic performance and consistent policies for growth and alignment with common EU goals and standards. In 2006, Bulgaria continued a steady upward trend and reported a real GDP growth of 6.3 per cent, with a total GDP of 25.1 billion euros for the country’s population of 7.7 million. The financial sector and banking system have recovered from several dramatic crises in the beginning of transition which caused the introduction of a currency board in 1997, pegging the Bulgarian Lev (BGN) to the euro at 1.95583:1. Currently most of the commercial banks in Bulgaria are strong, internationally-owned entities and operate according to international banking practice. Recent years have seen intense competition between the banks and a powerful expansion of commercial bank lending in response to increasing demand from corporate clients and households, ultimately forcing the Bulgarian National Bank (BNB) to intervene with some moderate measures to offset debt concerns. In the fourth quarter of 2006, bank claims on the non-government sector rose by BGN 1981.7 million (1013.2 million euros), whereas their annual growth rate reached 24.6...
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