The private individuals were those who saved the banks from the loan crisis experienced after 2014. On the one hand, the deposits started to grow in volume. On the other hand, the volume of released loans fell below the level witnessed before the crisis. Currently, the total balance of loans is of about 32 billion lei, as opposed to 48 million lei before 2014, journalist Victor Ursu was quoted by IPN as saying in the talk show “15 minutes of economic realism”.
According to Victor Ursu, the volume of loans diminished owing to the stricter rules imposed by the National Bank of Moldova and to the Basel III regulatory framework that envisions a broader diversification of the client base and high-quality risk management. This way, after reducing the volume of loans the banks had larger liquidity (rise in the balance of deposits) that they could not use. They started to orient to private individuals who are actually the best payers, with a nonperforming loan rate of 3%.
Following the encouragement of consumer and real estate loans intended for private individuals at the end of 2018, the balance of released loans will be positive. “The trend will persist as the authorities already announced the continuation of the “First House” program and also due to the stabilization of interest rates,” stated the journalist.
He noted that following the rise in the volume of loans, the families with low incomes that experience difficulties in repaying loans could become heavier indebted. Problems are mainly faced in the repayment of consumer loans when the client loses the job or becomes sick.
The deposits attracted from private individuals and legal entities remain the source for financing bank loans. These represent about 50% of all the liabilities. But the short maturity of deposits remains the key problem. Most of the deposits are made for six and 12 months.
The program “15 minutes of economic realism” is produced by the Institute for Development and Social Initiative “Viitorul” in partnership with Radio Free Europe.
