About 55 per cent of urban households in Bulgaria have borrowed money from various sources over the past half year.

This is shown in a report on a survey conducted by the Alpha Research polling agency among 900 urban households in April.

Unveiling the findings, Alpha Research director Stanislav Stoyanov identified three main types of loans used by urban households: consumer loans from banks (used by 27.9 per cent of respondents), loans from relatives and friends (20.2 per cent), and hire-purchase loans (14.1 per cent).

A growing proportion of people prefer to use small non-bank loans of up to 10 000 leva, Stoyanov said.

The survey shows that urban households already own large quantities of white goods and consumer electronics, with their intentions for future purchases still largely focused on this type of goods. The hire-purchase method is most often used for acquiring household devices, and bank loans are preferred for covering larger costs: buying a car or buying or repairing a house.

About 46 per cent of respondents find small consumer loans appropriate in the case of house repairs, 38.9 per cent find them appropriate when buying household devices and furniture, and 17.4 per cent believe small consumer loans can be used to cover current expenses.

Nearly 11 per cent of respondents would use a small consumer loan to buy a car, and 5.7 per cent would use such a loan to pay for education and occupational training.

Two urban households out of three distinguished between a banking loan and a non-banking loan, Stoyanov said. One advantage associated with non-banking loans is that they can be obtained quickly and through a simpler procedure.

Asked to describe their financial status, 52 per cent of those polled said their income was just enough to cover living expenses, and 28 per cent said their income was not even enough to cover living expenses. Another 17 per cent of interviewees earn incomes that are large enough to allow savings and larger purchases.

The Bulgarian National Bank published statistics on April 28, according to which exactly 1.1 million Bulgarians had taken out a bank loan by end-2005.

According to the local business weekly newspaper Banker, the gap between the rich and the poor is evident on banks’ balance sheets when it comes to deposits.

In Bulgaria the general figures, even when they are correct, give distorted information about the situation in the country. Impartial figures show that most of the deposits – 8 257 580 or 84.11 per cent of all savings in banks – are in the group of size of up to 1000 leva each. Only 892.68 million leva, or 7.6 per cent, of all citizens’ money in banks is deposited in them.

If the aggregate amount of money is divided into the number of deposits, it can be seen that the average size of the savings is 108 leva – a miserable amount even for a poor country such as Bulgaria.

In fact, the majority of the population does not have savings to be used in extreme situations such illness, unemployment and others, nor does it have sufficient income in order to save for hard times.