The day in 3 news: Mortgage lending rules tightened; Chaira Plant repairs delayed; Chinese e-commerce giants disrupt Bulgarian market

Капитал

The day in 3 news: Mortgage lending rules tightened; Chaira Plant repairs delayed; Chinese e-commerce giants disrupt Bulgarian market

Капитал

© Капитал


BNB to introduce stricter mortgage lending rules

The Bulgarian National Bank (BNB) will introduce new measures aimed at tightening mortgage lending starting from October 1, 2024. These measures include limits on the loan-to-value ratio, debt service-to-income ratio, and the maximum loan maturity. The changes come in response to rapid growth in mortgage lending, with household mortgage portfolios increasing by over 25% by July 2024. BNB aims to mitigate potential medium-term risks in the banking sector due to rising debt levels and housing prices. While the new rules are seen as moderate, they are expected to affect a smaller portion of the market.

Delays to Chaira plant repairs cause concern as weather looms

Despite the urgent need for repairs at the Chaira Pumped Storage Plant, the tender for replacing two hydro units has not yet been announced, two months after it was reported to be near completion. The initial tender failed due to a lack of interest, despite its value of 53.5 million levs. Toshiba, the original equipment manufacturer, is expected to assist with the repairs, as negotiations with the company are ongoing.

However, the delay in publishing the new tender raises concerns. Winter brings heightened electricity use and the fact that Chaira, a key system balancer, is still out of service will not allay fears.

Bulgarian market undercut by Chinese e-commerce platforms

Chinese e-commerce platforms Shein and Temu are causing significant challenges for Bulgarian businesses due to what is perceived to be aggressive pricing, quick deliveries, and products that often flout EU safety standards.

Local companies, particularly in the second-hand clothing and retail sectors, have seen closures and a sharp drop in sales as they struggle to compete with the low prices. Concerns have also been raised about the health risks posed by products containing toxic chemicals and the platforms' use of state subsidies and potentially exploitative labor practices. Calls for tighter regulations, including the removal of customs exemptions for low-cost imports from non-EU countries, are growing. Bulgarian industry leaders stress that these practices are unfair and damaging to businesses and consumers.

BNB to introduce stricter mortgage lending rules

The Bulgarian National Bank (BNB) will introduce new measures aimed at tightening mortgage lending starting from October 1, 2024. These measures include limits on the loan-to-value ratio, debt service-to-income ratio, and the maximum loan maturity. The changes come in response to rapid growth in mortgage lending, with household mortgage portfolios increasing by over 25% by July 2024. BNB aims to mitigate potential medium-term risks in the banking sector due to rising debt levels and housing prices. While the new rules are seen as moderate, they are expected to affect a smaller portion of the market.

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