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BNR: Banks estimate harsher credit standards for all credit types
Banks estimate harsher credit standards for all types of credits, the most affected being consumer credits for people and short term credits granted to small and medium companies, according to a survey made by the National Bank of Romania on credits granted to non financial companies and to people.
“In the context of Covid 19 pandemic which spread in Romania by mid March 2020, the credit market recorded important changes in Q1, 2020. Expectations for Q2 continue the same tendency, but in a more pronounced way. In Q1, a moderate share of credit institutions hardened credit standards, while demand for credits dropped. For Q2, most banks estimate harsher credit standards especially for consumer credits for the people and short term ones for small companies. The credit demand is estimated to drop in Q2,” the BNR report shows.
The credit demand from companies dropped in Q1. In Q2 banks estimate a reduction of credit demand from companies, especially small ones.
In Q1, 2020, many credit institutions pointed out harsher credit standards for the people, both for the purchase of houses and lands (12.1%) and in case of consumer loans (21.4%). Banks estimate the same tendency for Q2 and harsher credit standards (net 44.9% for real estate credits, net 59.9% for consumer credits).
Banks reported an increase of the share of credits requests rejected in Q1, for both categories of credits granted to people (net 20.7% for real estate credits , net 13.9% for consumer credits).
The survey is made by BNR on a quarterly basis in January, April, July and October. Is is based on a questionnaire sent to the first ten banks selected according to the market share for credits granted to companies and people. These institutions hold 80% of credits in those sectors.