The coexistence of the banking and nonbanking lending institutions on the same market is an absolutely natural phenomenon that is now being transformed, noted the governor of the National Bank of Moldova Octavian Armașu. According to him, the nonbanking lending organizations, owing to the small dimensions and the increased risk profile, have greater flexibility, lower processing costs and usually provide smaller loans.
“Their markets in normal conditions are different to a great extent and the overlapping of activities is not critical,” Octavian Armașu stated in an interview with the press.
In 2018, the regulatory basis of the given sector was laid by adopting the law on the nonbanking lending organizations that took effect on October 1 last year. “The reformation of the sector will contribute to establishing a healthy competition environment that would ensure balanced assumption of risks and would offer the clients different financing instruments amid the protection of consumer rights,” stated the governor.
The National Bank monitors the lending market in general so as to understand the processes and phenomena. There was created a new platform – the National Committee of Financial Stability – that includes representatives of the National Commission for Financial Markets. “I would like this commission to be operationalized so that it is functional based on this mechanism and we have a greater impact in the regulation of the given market,” said Octavian Armașu.
