In the forthcoming period bankers expect banking standards for the economy to lower, and standards for the population to increase, especially regarding granting loans, as a high-quality collateral will be requested, show the survey conducted by the Central Bank.
That basically means that economy would be able to obtain loans more easily than. On the other side, citizens will be required to meet tougher criteria for cash loans especially.
Around 190.000 citizens are indebted, which means that every citizen owes on average €10.700.
Central Bank started the survey on the credit activities of banks in April last year.
“Results of the latest survey show that credit standards for the economy and population were relieved during the third quarter of 2019. Banks expect even further decline for the loans for economy, whereas standards for granting loans to citizens are expected to increase”, reads the document.
According to the expectations of banks, lower costs of sources should be in function of further lowering credit standards for the economy.
“We should also take into account macroprudential measures adopted by the CB Council on 14 October. The measures define that banks are obliged to request full, high-quality collateral for the cash loans with repayment period longer than 6 years”.
Bankers think that more demanding value of mortgages could contribute to stricter requirements. However, bankers don’t agree that economy should set less stringent criteria for granting loans.
Part of the banking sector expects that worse economic situation could have an impact on slightly tougher credit standards and that there could be greater risk of the required collateral.
According to the data, requests for borrowing are on the increase.
Economy usually takes out loans for the purposes of financing working capital, capital investments and restructuring debts, whereas citizens are usually driven by the need for refinancing debts and buying real estate, cars, furniture…
Three types of enterprises, micro, small and medium enterprises are expected to increase demand for loans.
As for the population, increase in demand depends on the financial needs of the citizens.
