Consumer credit is booming in Bulgaria.

For the first five months of 2007, demand for consumer credit in Bulgaria increased 22 percent. The loans were used principally for home repairs. Improvements in household energy efficiency were also cited as the purpose of a loan.

The figures were reported in the weekly English language newspaper Sofia Echo (Sofia), which cited the Credit Center, a local consultancy, as the source. The information was relayed to the Echo via the Focus news agency.

The Credit Center also reported a developing trend in Bulgarian consumer loans. The firm noticed an uptick in loans used for debt consolidation. In addition, new loans were being used for leasing agreements.

Mortgage market liberalization in Bulgaria has led to a decrease in mortgages underwritten for consumers themselves but more mortgage activity was noticed in the housing sector. The Echo said that smaller consumer loans represented a higher risk for consumers than did bigger loans with longer term commitments.