Bulgarian banks have BGN 351.7 million of new corporate and household loans in November as the recent credit boom of 60% growth rates came to an end, showed data of the central bank. The average monthly loan volume shrank to BGN 1.2 billion in the past six months from BGN 1.1-1.4 billion in 2007 as new loan numbers halved from the previous month extending a gradual decline that began in July when the global financial turmoil struck hard.

Companies took BGN 187 million in loans as households borrowed BGN 124 million.

The annual growth rate fell below 40% year-on-year to 39.5% in November from 62.1% for the same month a year ago.

In a bid to help ease the strained credit market, the Bulgarian National Bank decided to consider reserves 50% of the cash in lenders’ vaults as of October 1 and relaxed access to the money parked with it as reserves cutting the ratio to 10% from 12% as of December 1. A further reduction comes into force from the beginning of 2009.

It is hard to make any predictions at the moment and any forecast may turn out to be wrong in just a few weeks, EIBank CEO Petar Andronov told Dnevnik.

The reduced banking funding and the smaller foreign direct investment should be replaced with government investments and a much more efficient absorption of EU funds, Andronov said.