After a difficult period, the political situation in Bulgaria improved quickly. The country soon returned to normal life. As stability increased, commerce and industry began to grow again. Businesses became more active, and production expanded in many areas of the economy.
This recovery created new opportunities, but it also brought new challenges. Trade with foreign countries became more important than before. As international commercial relations expanded, the need for credit increased rapidly. Merchants, manufacturers, and local authorities all required financial support to continue their work and grow.
The Bank’s Early Efforts to Support Development
The Bulgarian National Bank did its best to support this growing economy. Within the limits of its available resources, the bank assisted the commercial and industrial sectors. It provided loans and basic banking services to help businesses operate more efficiently.
However, the bank soon realized that its capital was not sufficient to meet the rising demand. The growing economy required more financial resources than the bank could supply on its own.
Obtaining Foreign Capital
To continue fulfilling its mission, the bank decided to seek foreign capital. This decision proved successful. Foreign investors were willing to lend money because the bank offered high interest rates, especially on long-term deposits. For example, deposits held for at least five years earned interest of 7 percent, which was very attractive at that time.
In addition, the strong confidence of the population in the bank, which was a state institution, allowed it to expand the issue of banknotes. People trusted the bank and accepted its notes without hesitation.
Cooperation with Deutsche Bank
As a result of the law of 1886, the Bulgarian National Bank entered into an agreement with Deutsche Bank of Berlin. Under this agreement, the bank received a loan secured by the issue of mortgage preference shares with a nominal value of 10,000,000 francs.
This successful operation encouraged further action. In 1893, the bank issued another series of similar preference shares, again totaling 10,000,000 francs. These measures greatly increased the financial strength of the bank.
Expansion of Banking Activities
With its capital strengthened, the bank rapidly expanded its discounting operations. It also provided significant financial support to government departments, local communes, and private individuals. Many loans were granted on the basis of mortgages.
These mortgage loans had an important social impact. Thanks to the bank’s support, many towns were reorganized and modernized. Streets, buildings, and public services improved, and hygienic conditions in urban areas became much better.
The combination of political stability, foreign capital, and public confidence allowed the Bulgarian National Bank to play a key role in national development. Its financial activities supported trade, industry, and urban improvement, helping Bulgaria move toward economic progress and modernization Private Tour Istanbul.