Contrary to the common European practice, Bulgarian Law of Consumer Credit Protection is not applicable for loans under BGN 400 (a little more than EUR 200) and in case the loan is for up to three months. Currently these loans are outside the scope of this protection law and there are no limits. Although the government has been considering changing the law, this has not happened up to date so any companies that work in the field of micro loans can take advantage of the delay in regulating these micro loans. Currently most companies offer such micro loans with around 35% monthly interest that makes more than 400% per annum, which is much more as compared to other European countries.

Furthermore, a licence is not required – companies that provide short-term micro loan services operate as non-banking financial institutions which are subject to registration with Bulgarian National Bank (BNB). The procedure of obtaining a certificate is relatively quick – BNB completes registration within 30 days from the date of submitting application documentation.

The basic requirements for successful company formation and registration are:

• BGN 250 000 minimum capital (the minimum required capital must be maintained at all times)
• Owners / shareholders must have clean criminal record
• Managers should match the following criteria: higher education in Law or Economics, at least three years of experience in a similar field, clean criminal record