Glossary
Financial Leasing Company
A type of financial institution that provides financing for the acquisition of a specific asset. The lessee uses the asset but acquires ownership after the lease agreement ends.
Financial Literacy
A combination of financial awareness, knowledge, skills, attitude, and behaviour necessary to make sustainable financial decisions and achieve individual financial well-being. This definition is adopted by the Organisation for Economic Co-operation and Development (OECD) and is included in the National Strategy for Financial Literacy of the Republic of Bulgaria. The goal of financial literacy is to prepare people to manage their money wisely, avoid over-indebtedness, save and invest prudently, and plan for the long term (e.g., retirement, education, healthcare).
Financial Plan
A structured strategic document outlining how an individual, household, or organization will manage income, expenses, savings, investments, and liabilities to achieve specific financial goals, such as retirement, home purchase, education, business development, or risk protection. It includes analysis of the current financial situation, setting short- and long-term goals, budgeting, saving and investment strategies, and risk management through insurance. The financial plan is flexible and periodically reviewed to reflect changing needs and circumstances.
Financial Product or Service
A tool or instrument for managing financial resources, offered by financial institutions, such as banking products, insurance, investment instruments, and pension schemes.
Financial Pyramid Scheme
A fraudulent scheme in which participants’ profits depend primarily on recruiting new members rather than on real economic activity or sales of products or services. Participants invest money with promises of high returns, but to earn profits, they must recruit new investors. Funds from new participants are used to pay the “profits” of earlier investors. The system collapses when new recruitment stops. Financial pyramid schemes are illegal, rely on misleading information, and cause losses for most participants. They are investigated by financial regulators, and organizers can face severe penalties. They should not be confused with legitimate multi-level marketing (MLM) based on real product or service sales.
Financial Sustainability
The ability of an individual or organization to successfully carry out its functions in a changing financial environment.
Fine
A type of administrative penalty, which is a monetary sanction imposed on a natural or legal person for committing an administrative violation specified in law or subordinate legislation. The amount of the fine is usually set by the respective law and may be fixed or within a range. It is imposed by an administrative authority—such as the police, municipality, labour inspection, tax administration, etc. It is not a judicial punishment but is subject to judicial review and can be appealed before a district court. It differs from a property sanction, which is imposed on legal entities and sole traders. Fines are mainly regulated by the Administrative Violations and Penalties Act.
Fiscal Decentralization
The process by which certain powers to collect and allocate public funds are delegated by the central government to local self-government authorities.
Fixed Interest Rate
A constant interest rate applied for the entire term of the contract or for a specified period thereof.
Fixed Margin
The margin representing the credit risk borne by the bank when issuing a loan to an individual borrower.
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