After the banking crisis of 2014, banks faced an anemic demand for loans. On the one hand, deposits began to increase, and on the other hand, the volume of loans granted fell below the level before the crisis. Currently, the total balance of loans is about 32 billion USD compared to 48 billion USD as it was before 2014, explained in the program “15 minutes of economic realism.
The reduction of lending
The reduction of lending took place against the backdrop of stricter rules imposed by the National Bank of Moldova, but also as a result of the Basel III regulations, which provide for a broader diversification of the client portfolio and qualitative risk management.
Thus, after reducing the lending, the banks found themselves with a large volume of liquidity (an increase of the balance of deposits) that they had nowhere to direct. In this context, they have started to focus on individuals, who are also the best platinum people with a non-performing rate exceeding 3%.
That is, by promoting the granting of consumer loans, as well as real estate loans through the “First Home” Program. For example, some banks grant consumer loans of up to 100 thousand USD without collateral. And for real estate loans, people working abroad are also accepted. The condition is to have a work contract and a monthly income in excess of 900 USD, ”says Victor Ursu.
To grant consumer loans and real estate loans
As a result of the impetus to grant consumer loans and real estate loans to individuals at the end of 2018, the balance of loans granted will be a positive one. The trend will continue next year, as the authorities have already announced the continuation of the “First House” Program, but also against the backdrop of stabilizing interest rates. In November, the average rate of loans granted to individuals amounted to 7.74%, and to legal entities – 9.03%.
For 2018, the estimates show an advance of over 25% of the loans granted. However, as a result of the increase in loans among the potential risks, however, the increase in the level of indebtedness of the low-income families, where the repayment of the loans presents a certain difficulty.
Most problems arise in consumer loans
If the client loses his job or becomes ill. Debt increases most among high-income customers. Moreover, the repayment of loans can become a problem if the price of the apartments will increase this against the backdrop of the increase of the real estate loans granted through the “Prima Casa” program.
The sources of financing for bank loans remain deposits attracted by natural and legal persons. These represent about 50% of total liabilities. But the key issue remains the short maturity of deposits. Most of them are for six and 12 months.
In conclusion, Victor Ursu claims that the natural persons have proved to be the ones who saved the banks from the crisis of granting the loans they entered after 2014. In the medium term, for now, this is the stake of the bankers.