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At Least 20% of Bulgarians Live in Poverty

Date: 11.10.2009

At least 20 % of Bulgaria’s population lives in poverty, shows a research of the Sociology Institute of the Bulgarian Academy of Sciences.

One-fifth of the Bulgarians have taken bank loans just in order to ensure their physical survival. The BAS experts demonstrated a clear impoverishment trend, and said the new government had to reconsider thoroughly the social policies of the state.

“The crisis in Bulgaria started in 2007 since this when a number of Bulgarians started to take bank loans just in order to survive,” said Professor Duhomir Minev, adding that the whole income system in Bulgaria was shattered; however, he refused to make recommendations out of fear they might be misconstrued as political involvement.

The BAS survey shows that almost 30% of the Bulgaria’s have bank loans. More than 76% of them are of households with low income – up to BGN 600 per household. The experts stress that over 35% of the unemployed are also paying off loans thanks to their working spouses or relatives.

At the same time, the ones who fail to pay off their loans are only 3% of the total number of Bulgarians with credits.

Professor Garabed Minasyan said it was too early to speak of a definite trend of lowering loan interest rates.

“If the banks’ credit interest rates from the current 10-12 % down to 4% as everybody wants, then the deposit interest rates may go down to 1%, which will make everyone withdraw their money, and the banking system will collapse,” said Minasyan.

The BAS experts believes that Bulgarians have an extremely low financial awareness. They suggest that an independent financial consultants’ institution or a credit ombudsman be set up to help those in debt.

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