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Liviu Voinea: Immediate, non banking credits might have lower interest rates as of October 1

The National Bank of Romania will introduce, as of October 1, a prudential norm for immediate credits, offered by non banking financial institutions (NFI) and interest rates will drop, said BNR deputy governor Liviu Voinea.

“NFIs practice annual interest rates of 4,000-7,000%, which does not seem much on a short term of two weeks. For instance, for a credit of 1,000 lei for 15 days, the customer returns 1,147 lei. As of October 1, we will introduce a prudential norm by which NFIs ask for interest rates of over 200% will have to bring additional amounts as provisions. For 100 lei borrowed, they will have to bring 67 lei. It means that for the 1,000 lei credit the customer will return 1,046 lei”, Voinea explained to ZF Live.

BNR deputy governor mentioned it was not a measure meant to protect consumers from immediate credits but a prudential measure to avoid systemic risk. “If they ask 7,000% interest rate it means they consider those credits risky,” the official said.

At present, Voinea added, only a part of NFIs are in the special BNR register, while the rest are in the general register, where they are just monitored.

According to the central bank official, the crediting offered by NFIs grew by 20%, while bank crediting grew only by 3%, which determined the introduction of the prudential measure. “the average credit granted by NFI is 3,300 lei”, Voinea said.