Twenty-eight years have passed since the obtaining of independence, but the financial market of the Republic of Moldova is yet poorly developed. The banks and, newer, the microfinance companies that develop swiftly are the only instrument that remained valid, said the economist of the Institute for Development and Social Initiative “Viitorul” Veaceslav Ionita, IPN reports.
In the program “15 minutes of economic realism”, produced by “Viitorul” in partnership with Radio Free Europe, Veaceslav Ionita said we are now witnessing an unprecedented growth in non-banking lending amid the banking crisis through which Moldova went after 2014. The non-banking sector grew by 25%, doubling the volume of loans provided to the economy and also the share in the volume of granted loans from 16%, and this will most probably exceed 20-25% in several years. The bank lending to the economy was stopped and the volume of bank and non-bank loans increases owing to private individuals.
Veaceslav Ionita said this shows that Moldova should reconsider its whole financial system. The banks and the non-banking entities are few in number and the applications for financing cannot be satisfied. A blockage is thus witnessed amid the rise in the number of deposits made by people. “The banks now finance the state securities, which are practically the only documents that circulate in Moldova. That’s why the authorities should create preconditions for developing other financial instruments, such as the issuing of bonds by companies and by the local public authorities. This way the companies and the population will have the opportunity to finance the businesses and the authorities, avoiding the banking and non-banking sectors,” stated the expert.
According to him, the securities of private individuals are another instrument that should be developed. These become open, transparent and with access to the capital market. It is a new instrument that can enable to develop bonds. Moldova should think how it can integrate the stock exchange of Chisinau into a regional exchange, together with the exchanges of Bucharest and Budapest.
Veaceslav Ionita also said that the authorities should also draw attention to the liberalization of the transfrontier financial services as the lack of flow freedom pushes Moldova towards a blockage.
