NO FESTIVE CREDIT PROMOTIONS
For Bulgarian banks the festive season has obviously begun quite a time prior Chirstmas, considering the fact that they did not flood the market with promotions of products and services. It was logical to expect that credit institutions would use the season to attract new clients by offering specialized loans for purchase of presents and trips abroad, as well as products with reduced interest rates, fees and commissions, and extended repayment terms. However, it turned out that just a few banks thought about their customers before Chirstmas.First Investment Bank (FIB)was the only one that advertised a new loan especially for the holidays. It will extend up to BGN5,000 under its Christmas Credit against a promissory note, signed by the client and a warrantor. The loan is repayable within 36 months at an annual interest rate equal to the base interest rate (currently 2.36%) plus a 9% surplus. The monthly instalments will be BGN164.93 if the credit will be paid back within three years, BGN234.25 - for a two-year repayment period, and BGN443.12 for those clients who will settle it by the following Christmas. The bank has no specific requirements to the customers regarding the way they will spend the lent money. It could well be used for buying presents or for a trip to an exotic spot.The Christmas Credit is accompanied by some additional bonuses - e. g. issuance of a Visa credit card or a MasterCard with a BGN500 overdraft, as well as an 1% increase of the interest rate the client will get if he opens a child deposit by the end of 2005. If the deposit belongs to an adult, he will enjoy a 0.25% bonus to the interest rate.FIB's offer includes a bite for car owners as well, who are offered a 5% discount for signing a Civil Liability Insurance with Bul Ins.Instead of special new products, some banks preferred to offer for the season consumer credits at relieved terms. For instance SG EXPRESSBANKannounced it would be releasing its Credit Expresso consumer credit at a 3% lower interest rate till January 31, 2005. If a client draws a BGN5,000 loan now he will be paying back monthly instalments of BGN448.94 for a one-year repayment period, BGN240.06 for a two-year repayment period, and BGN170.89 for a three-year repayment period. For Christmas and the New Year the bank offers as well loans of BGN10,000 and BGN20,000 under the Credit Expresso programme. The loan of BGN10,000 shall be released without warrantors. Customers who have been prompt payers to the bank for a year are entitled to getting a BGN20,000 credit under the same programme. The only requirement to them is to prove that their monthly incomes are sufficient to pay their instalments regularly and in due time. The repayment term is five years. It is true there are hardly many people in Bulgaria who would readily splash out BGN20,000 during the festive season alone, but those who intend to draw a credit could take advantage of the lower interest rate and repay it in 60 monthly instalment of BGN465.37. As an additional bonus the bank offers a 50% discount of the one-time fee it charges from the client on utilizing the credit (which is between BGN36 and BGN165, depending on the size of the Credit Expresso). Moreover, if the customer opens a saving deposit of at least BGN30 on behalf of his child when getting the loan, he will enjoy a 0.25% higher interest rate on it. The credit proposal ofDSK Bankis a combination of a new product and lower interest rates for an already drawn loan. For almost a month now the credit institution has been advertising a loan for the purchase of goods from the Praktiker chain of specialized shops for furniture and construction materials. For the purpose the bank even opened its office at the entrance of the shop in Sofia where citizens can file their documents and know within an hour if they will get the loan or they have been refused the money. The ceiling for such a loan is BGN10,000, repayable within seven years. When purchasing from Praktiker goods worth BGN1,501-BGN3,000, the customer could use a credit amounting to 95% of the price of the commodities. If the price is in the range of BGN3,001-10,000, the buyer has to pay 20% of it and cover the balance by the loan. The requirement in that case is that BGN60 per month should remain for each member of the customer's family after paying the monthly instalment. No guarantees are required for loans up to BGN3,000. During the Chirstmas and New Year season DSK Bank's clients may also shop in the Metro chain hypermarkets. If they buy goods worth BGN1,000 they may pay back the loan within three years in monthly instalments of BGN35.87. If the credit amounts to BGN2,000, it is repayable within four years at BGN47 per month.Bulgarian Post Bank and EUROBANKhave chosen another attitude in order to make things easier for their clients during the holidays. Instead of extending credits at more advantageous terms, they relieve them from paying fees for getting their credit cards. Logically, Bulgarian Post Bank offers the Euroline cards of Bulgarian Retail Services (a company which like the credit institution itself is owned by the Greek EFG Eurobank). They are given to Post Bank's new clients who open with it deposits, keeping in them at least BGN500 per month. Thus, they may get a credit card without paying the BGN25, otherwise charged for issuing it. EUROBANK issues free of charge a Transcart to those of its clients who are subscribers of M-Tel and have been promptly paying their bills to the GSM-operator for at least six months. The credit ceiling is BGN500.These are the banks' festive promotions. There is not much to be chosen from. This seems strange, considering financial institutions' ambitions to expand their market share in the area of crediting and in attracting deposits from citizens and firms.