APPLICATION FOR OPIC FINANCE: CREDIA-DIRECT

UNCLAS SOFIA 000378 SENSITIVE SIPDIS STATE PLEASE PASS TO OPIC - DEBRA ERB STATE ALSO FOR EUR/NCE VALDA VIKMANIS-KELLER E.O. 12958: N/A TAGS: EINV EFN BU SUBJECT: APPLICATION FOR OPIC FINANCE: CREDIA-DIRECT BULGARIA PROJECT REF: STATE 57225 ¶1. (SBU) Per reftel, Post has no derogatory information on Credia Direct Bulgaria, CreditLand, Moite Pari, FinZoom or on the principal investor and senior manager Deyan Stoikov Vasilev (or Vassilev). Our Economic Specialist knows Mr. Vassilev from their days at the American University in Bulgaria (AUBG),where Mr. Vassilev ran the student government. According to our Economic Specialist, Mr. Vassilev was a decent and entrepreneurial person who made a good start with the Moite Pari (my money in Bulgarian), advising all types of financial lending. He was a pioneer in that Motie Pari was ahead of many other specialized financial sites in Bulgaria. ¶2. (SBU) Sound economic performance (over the last several years averaging five percent) political stability, and EU membership have enhanced Bulgaria's ability to attract respected international investors. However, with 45 percent of investment in 2007 in construction and real estate -- two non-productive, non-export sectors -- there is some question about the quality/efficiency of the new investment stock. Lending for real estate is risky at present given Bulgaria's high inflation and growing current-account deficit (over 20 percent of GDP in 2007). Problems that American investors encounter in Bulgaria include: corruption, sluggish government bureaucracy; poor infrastructure; frequent changes in the legal framework; low domestic purchasing power; and protracted privatization processes. A weak judicial system limits investor confidence in the courts' ability to enforce ownership and shareholders rights, contracts, and intellectual property rights. The Bulgarian National Bank (BNB) website's English language edition lists Bulgaria's entire legal framework that includes laws relevant to OPIC's interests. The website is http://www.bnb.bg and has a link to its English language version. Beyrle