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The corona virus and the economic disasters it caused have completely different effects on the indebtedness of citizens and the economy. The first stopped the new loans and the second unblocked it. This is demonstrated by new data from the National Bank of Serbia on the volume of loans during the first six months.
In the second quarter, which coincides with the time the virus appeared, banks approved new loans worth 75 billion dinars to the population. Compared to the same period last year, it is half less, exactly 52.6 percent, or 40.7 percent after excluding the effect of loans refinanced with the same bank. With the newly approved loans, cash loans accounted for 47 percent of the total and home loans 23 percent.
The mass of all loans made to households shows an increase in loans by 50.7 billion dinars, and the NBS notes that this is in part the result of a moratorium on loan repayments. In other words, the interruption in the repayment of the loans increased the carrying weight of the loans, since they were not repaid, so the amount of the debt was not reduced.
The central bank claims that this year, total credit is expanding at a double-digit growth rate. The first quarter, before the start of the crown, was excellent, the aforementioned effects of the April moratorium are also calculated and the loans from companies of the guarantee scheme also contribute a positive contribution since May. Total domestic loans in June posted year-on-year growth of 13.9 percent, while the loan structure remained favorable in terms of contributing to the growth of economic activity, writes Politika.
That the economic problems caused by the crown forced the economy to borrow can be seen in the growth data for the second quarter. At that time, lending to the economy increased by 45.3 billion dinars, and their year-on-year growth accelerated from 14.5 percent in March to 15.9 percent in June. Looked at by purpose, investment loans are the dominant category of loans to the economy, with a share of 44.4 percent in June, and their amount increased by 13 billion dinars during the second quarter. It is followed by loans for working capital, whose share in total loans to the economy in the growing need for liquid assets in recent months is growing and in June amounted to 40.7 percent, writes Politika.
“The balance of loans has increased in the accounts of companies of all activities, and especially with companies in the field of construction, real estate and traffic. The volume of newly approved loans to the economy in the second quarter amounted to 218.3 billion dinars, of which more than 50 percent were approved in June thanks to loans from the guarantee scheme. Compared to the same period last year, this amount is 24.2 percent lower, or 21.1 percent if we exclude loans refinanced with the same bank. Most of the new loans to the economy in the second quarter concerned loans for working capital – 130.5 billion dinars, while 70% of these loans were approved for the part of the market consisting of micro, small and medium-sized companies. That part of the market also used 75% of the new investment loans in the second quarter, “states the NBS.
The results of the central bank’s July survey of banks’ lending activity show that, in line with the expectations set in the April survey, they tightened the standards by which they approved loans to businesses and households during the second quarter, after of the virus. The reason is the risk in the uncertain conditions caused by the kovida 19 pandemic, which was present in the responses of most of the banks. On the other hand, competition in the sector and sources of financing in dinars were recognized as factors that acted in the direction of making standards more flexible, which is largely the result of the reduction of the benchmark interest rate of the National Bank from Serbia. Banks estimate that the economy’s demand for loans increased in the second quarter, for working capital loans and restructuring of existing liabilities. At the same time, the demand for loans by the population decreased in the same period, which may be related to the measures taken to protect the health of the population.
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