Moldovans prefer more to loan in national currency

Chisinau, 21 January /MOLDPRES/ – Bank customers prefer loaning in lei, the share of credits in national currency reached the maximum level of 71.2 per cent in December 2018 compared to 61 per cent in the same period of 2017, according to data from the National Bank of Moldova (BNM).

The loan lending has become attractive over recent year, with interest rates down close to the cost of foreign currency loans. The commercial banks reduced the weighted average interest rate on national currency loans from 9.80 per cent in January 2018 to 8.61 per cent annually in December. As a result, the volume of monthly financing provided by banks to businesses and the population almost doubled and exceeded MDL 2 billion in December.

The most attractive loans were granted on terms of 2 to 5 years (48.4 per cent of total contracted loans). The loans to legal entities accounted for 37.5 per cent of total loans. At least 53.7 per cent of credits were offered to commercial firms and 34.1 per cent to individuals, especially loans for real estate, after the launch of the state - run programme Prima casa (The first home).

"There has been growing interest in mortgages from citizens – we have lower interest rates, state support programmes, etc." The increase in mortgage loans is due to other factors and the implementation of the state – run social benefits program The first home, which provides for the possibility for Moldovan citizens of 18 – 45 to obtain loans for the purchase of their own dwellings," said in an interview the governor of BNM, Octavian Armasu. He added that as of 30 November 2018, the loans granted for the purchase/construction of the real estate constituted MDL 3.8 billion or 10.7 per cent of the portfolio of loans by sector.

After three years of anemic developments, amid interest rate cuts, demand for new loans from both individuals and businesses has increased, the Independent Analytical Centre Expert – Grup notes in the bank performance ranking report. For the first time since banking crisis of 2014 – 2015, the pace of granting new loans tends to be higher than the reimbursement of previously granted loans, which is also reflected in the stock of credit growth. Thus, at the end of November, the stock of loans granted by commercial banks recorded a value of MDL 35.4 billion.

The volume of loans in foreign currency recalculated in MDL amounted to 815.18 million lei, down by 9.7 per cent as compared to the same period of 2018.