The global economic turmoil has slowed down lending growth in Bulgaria more than 20-fold within 18 months, showed the latest figures by the Bulgarian National Bank (BNB).

As at end-March, business and household loans ticked up 2.3% year-on-year compared with 47.8% as at end-September 2008.

In the wake of the crisis, the Bulgarian credit market almost skidded to a halt thanks to waning lending activity, tougher requirements for borrowers and softer appetite to take on debt by both firms and households.

Over the 18 months, the increase in overdue credits accelerated more than fivefold, reaching 222% at the end of March 2010 for loans with payments more than 90 days overdue and restructured loans. This is a formidable rise from 43.6% in September 2008.

At the same time, the banking sector’s capital surged by nearly BGN 2 billion, or 25.5%, to BGN 9.5 billion as at end-February 2010.

The capital adequacy of the Bulgarian banking system was 17.04% at the end of last year, with a capital buffer of BGN 2.754 billion accumulated through retained profits and capital increases.