Private moratorium on loan obligations to banks in Bulgaria

Bulgarian banks may postpone payments on loans for 6 months

Written by Lilly Zhekova for K&G Finance, edited by Lindsay Martin, photo by Georgi Hristov.


In response to COVID-19, Bulgarian banks and their subsidiary financial institutions can opt into a private moratorium on loan obligations to banks for a “grace period” of 6 months. 

During the grace period, payments on loans will be postponed for up to 6 months, but no later than 31st December 2020. The grace period can apply to all payments on the loan or only the principal. The loan contract should be concluded prior to 31st March 2020.

The moratorium applies to both individual loans and company loans

Borrowers need to fulfill the following criteria: 

  • To have or expect difficulties in payment of obligations in connection with the pandemic of COVID 19 and the restrictions, introduced by the Measures and actions in time of emergency situation Act
  • Before 1st March 2020 their obligations on loans have been paid regularly or have been overdue less than 90 days;   
  • Express explicit desire to modify payment terms before 22 June 2020. 

Banks and their clients will agree on payment terms according to three possible options

  •  postponement of principal and interest on the loan for up to 6 months;    
  •  postponement only of the principal on the loan for up to 6 months;  
  • payment options, applicable specifically for revolving products  

You can read the full text of the private moratorium order in this direct link.

The moratorium framework is drafted by the Bulgarian Bank Association and approved by the Bulgarian National Bank. 

Currently, there is no full list of the banks that are opting in. Each bank should notify the Bulgarian Bank Association and announce publicly they will apply the rules. The list of all opted in banks will be published on the website of the Bulgarian National Bank. Most banks have already published announcements on their websites. 

Despite the moratorium, each bank is free to re-negotiate relief on loan terms on a case by case basis. 

K&G Finance team remains at your disposal for information and questions. Contacts: [email protected] 

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