Yani Ovcharov

Financial Literacy and Young Adult Indebtedness in Bulgaria: Structural Trends and Digital Strategies

Started Apr. 14, 2025

Abstract or project description

Youth over-indebtedness has risen sharply in Bulgaria amid persistently low financial literacy. Drawing on international and domestic literature, indicative administrative data suggest that approximately 30% of Bulgarians aged 25–30 were subject to enforcement actions by end-2024, underscoring the scale of the problem. This study analyzes the main drivers of widespread indebtedness and evaluates remedies. The literature review is complemented by a policy and implementation review of Bulgaria’s National Strategy for Financial Literacy (2021–2025) and its annual progress reports, and by analysis of secondary statistics on household credit, enforcement activity, regulatory reports, macroeconomic and demographic trends, and digital-banking adoption. We document a sizeable competence gap among adolescents, alongside rapid uptake of high-cost fast loans and opaque digital marketing. The paper advances a two-track response: strengthen curriculum-embedded financial education to build medium- and long-term capability; and leverage Bulgaria’s rapid uptake of digital banking to deliver practical, just-in-time education that reduces near-term harm. The study concludes by outlining avenues for future research, including (i) developing a more granular profile of young debtors; (ii) prototyping and evaluating digital-banking delivery models; and (iii) assessing whether tighter policy and enhanced supervision of the fast-loan market are warranted.