06.10.2022 BDB signed annexes with 9 banks for relief in interest-free lending to individuals
The bank's guarantee program introduces more facilities for repayment of loans already granted to support those affected by the COVID-19 pandemic
Bulgarian Development Bank has concluded annexes with 9 partner commercial banks for changes to its guarantee program for granting interest-free loans to individuals deprived of the opportunity to work due to the COVID-19 pandemic.
The granting of new loans under this program ended at the end of August 2021. The changes aim to relieve customers of already granted loans and were approved by a decision of the Council of Ministers of 7 July 2022. They include the possibility of a longer repayment period and allow the grace period to be used in parts.
Currently, annexes to the guarantee agreements have been signed with UniCredit Bulbank, Eurobank Bulgaria, UBB, KBC Bank Bulgaria (formerly Raiffeisen Bank Bulgaria), Municipal Bank, Allianz Bank Bulgaria, Investbank, Central Cooperative Bank and D Commerce Bank.
The possibility of negotiating with the commercial banks on a longer repayment period of the received funds has been provided for – up to 7 years instead of the previous 5.
There is also a change in the grace period. In accordance with the agreements reached between the customer and the commercial bank, it will be able to be used in parts through more than one amendment of the loan agreements and not be bound by the term of the loans. Until now, the framework conditions of the program allowed a minimum of 6 and a maximum of 24 months of grace period. However, less than half of active loans provide for the maximum term.
The expectations are that with the increase of the maximum term of the loans by another 2 years, banks and their customers will be more relaxed when choosing the maximum grace period, followed by a longer repayment period and, accordingly, a lower installment on the loans.
The procedure for presenting guarantees under the program has also been simplified. The change obliges banks not to announce loan acceleration before the expiration of 90 days of delay.
The period in which the banks were obliged to submit documents to the court for the issuance of an execution order or to file a claim for their claims on the loans has also been canceled. This is to help borrowers who, despite their temporary difficulties, are making efforts to repay their debts.
