Moldovan expert says higher demand on behalf of private persons, agricultural sector stimulates crediting

Chisinau, 21 September /MOLDPRES/ - We presently witness a slight revival of the process of crediting by commercial banks, triggered by an increase in loans for private people and the agricultural sector, after a continuous decrease of more than three years, an expert of the Viitorul Institute for Development and Social Initiatives, Veaceslav Ionita, writes on his blog.     

According to the economist, in last August, the portfolio of loans exceeded the level of the 2017 year, which shows that, after a drop of more than three years, the recovery of the portfolio lost on this period starts in 2018. Due to the fact that the crediting of private persons “increase much more quickly than we expected, till the end of this year, the portfolio of loans from the banking system will most likely exceed 35.2 billion lei, which allows us saying that, in 2018, the decrease from the last two years will be recovered; yet, it is still much up to the level of the 2014 year,” Ionita said.

In February 2018, the portfolio of loans from the banking system reached the level 32.1 billion lei, which is by 15.9 billion lei less than the maximum level from October 2014. This drop was due exclusively to the cut in the portfolio of loans provided to legal entities. On all this period, banks increased the portfolio of loans offered to private persons, which grew from 5.8 billion lei in October 2014 to 9.1 billion lei in August 2018.    

Private people diminished from the impact of the decrease in the crediting of legal entities and as a result, at present, the quota of loans provided to private people by the banking system increased from 11.3 per cent in 2014 to 24.9 per cent in August 2018 and will continue rising throughout this year, economist Veaceslav Ionita said.

The growth of the portfolio of loans by 1.7 billion lei this year is due to the increase in the loans offered to private people by 1.37 billion lei and to legal entities by 330 million lei. Almost 70 per cent of this growth occurred in last summer, when the portfolio of loans grew by 1.15 billion lei.    

The main sectors of increase in the portfolio of loans are the following: consumer loans – 700 million lei, real estate loans – 590 million lei; agriculture loans – 391 million lei, which together provided a growth of almost 1.7 billion lei.  

The average interest rate on the new loans in the national currency, provided by Moldovan banks, in August 2018 dropped to a new historical minimum level of 8.45 per cent annually, against 9.76 per cent on the same period of the year before. It is the fourth time in a row when the interest rate on financings in the Moldovan lei is maintained under less than nine per cent, according to data by the National Bank of Moldova.    

(Reporter V. Bercu, editor L. Alcaza)