SIMILAR ARTICLES

BNR analysis: Radiography of investments in Romania – under what conditions capital accumulation occurs

Foreign direct investment (FDI) and expectations regarding the demand have a positive influence on capital accumulation in Romania, while uncertainties play an inhibiting role, especially… Mai mult

National gross minimum wage: in Romania and EU countries

  Romania ranks second to last among EU states in terms of national gross minimum wage, according to data published by Eurostat, at a level… Mai mult

Some charts: Perfect chaos in Romanian budgets. A 4-year analysis of difference between law and implementation

Although at first glance it is difficult to draft them, Romania’s public budgets are, in fact, a series of indicators and lists of revenues and… Mai mult

Tax authority’s “armed arm” was handed over to Prognosis Commission. How strongest governmental structure looks?

ANAF’s new president, Mihaela Triculescu, handed over to the National Commission for Strategy and Prognosis – CNSP the power to decide what companies are to… Mai mult

Current account deficit – Romania goes to opposite direction compared to EU countries

Romania is clearly distinguishing itself within the EU in terms of current account deficit evolution, with the second highest current account deficit in 2017 and… Mai mult

Cronicile

Company financing: Firms’ aversion to credit – at high levels. Most favourite banking product – account overdraft

de Adrian N Ionescu , 9.7.2018

The rise in interest rates and fees is becoming increasingly worrying for companies and maintains companies’ aversion to banking lending at high levels, according to the most recent semi-annual survey by the National Bank of Romania (BNR) on the access to financing.

The other major, increasing difficulties in accessing a bank loan (or from an IFN) are:

  • requirements on the value or type of collateral
  • contractual clauses
  • bureaucracy

The proportion of companies that consider the level of interest rates and fees is too high and this is “a major difficulty in accessing a loan has increased by 9 percentage points,” according to the central bank’s survey.

“No banks” – the three-quarters of firms

“The products offered by banks and IFNs are not a priority for companies, except for the overstatement of bank accounts, for which 11% of the companies have opted for,” says the BNR study on the results of the survey.

*

  • Difficulties faced by non-financial companies that applied for loans in accessing financing from banks and IFNs between April 2017-March 2018
  • Low     Moderate         Significant
  • Percentages
  • F1 – too high interest rates and fees
  • F2 – requirements related to the value and type of collateral
  • F3 – contractual clauses
  • F4 – bureaucracy
  • F5 – maximum indebtedness level allowed by the financial institution
  • F6 – lack of transparency from the financial institution
  • F7 – company’s business plan and the objective of the financing
  • F8 – company’s credit history
  • F9 – inadequate qualification of the financial institution’s personnel
  • F 10- the age of the company
  • F 11- lack of the credit product in the currency requested
  • Note: closed questions with options weighted from 1- very high to 5 – very low or with no impact, where the “significant” attribute is assigned to levels 1 and 2, “moderate” to level 3, and “low” to 4 and 5.

*

“No banks” – motto for three-quarters of companies

“Products offered by banks and IFNs are not a priority for companies, except for the bank account overdraft, which was the option selected by 11% of the companies,” says the BNR study regarding the results.

The most preferred financing sources are:

  • profit reinvestment or asset selling
  • loans from shareholders or capital increases; and
  • commercial credit

*

  • Main financing sources for companies between April 2017 – March 2018, by fields of activity
  • Agriculture
  • Manufacturing
  • Services and utilities
  • Construction and real estate
  • Trade
  • profit reinvestment or asset selling     loans from shareholders or capital increases             other    commercial credit            bank account overdraft or credit line  bank loan for capital investment         financial leasing or factoring            loans with guarantees from the guarantee funds       treasury banking loan             state financing program            financing by shares or bonds

*

The availability for using banking or leasing products “has considerably declined” and “the availability for reinvesting profits or selling company assets has increased the most”.

The share of internal resources (including loans from shareholders) and commercial credits (namely, late payments) are still the most important financing means for companies.

Still, about 72% of companies do not have bank loans, and more than three quarters (78%) of companies have not used loans from banks or IFNs over the past 12 months surveyed.

Percentages are considered very high, even though the share of companies that did not apply for loans is slightly lower than the survey published in December (85%). The current BNR survey covers the period April 2017-March 2018.

*

  • Relationship of non-financial companies with banks and IFNs in the period April 2017-March 2018
  • Percentages
  • June 2018       June 2017
  • Improvement  Not changed   Worsened        don’t have loans under implementation
  • Perceptions of non-financial companies on terms and conditions applied by banks and IFNs between April 2017-March 2018
  • Percentages
  • The company has not used financing from banks and IFNs
  • Decrease
  • Constant
  • Increase
  • F1 – level of interest rates
  • F2 – level of the financing cost, other than the interest rates
  • F3 – amount available of the loan or credit line
  • F4 – maturity of loan or credit line
  • F5 – requirements on the value and type of collateral

*

This behaviour, regarding a low appetite for banking or IFN lending, defines especially SMEs (78%), while the proportion for corporations is around 51%,” says the BNR study.

Only 28% of the 11,000 firms surveyed “applied for financing from banks/IFNs and used these funds for establishing a working capital or paying suppliers”.

Mergeți în homepage ›

Publicat la data de 9.7.2018

Lăsați un comentariu


NEWS

"Iceberg" operation: ANAF announces that it selected 487 companies which are to be audited based on risk analysis

Virgil Pirvulescu, Vice President of ANAF at PwC Annual Tax Conference The National Agency for Tax Administration (ANAF) has identified 487 large and medium-sized companies… Mai mult

Commissioner Corina Cretu: There is a risk that Magurele Laser will not be completed during this budget implementation

In the absence of a rapid response from the Romanian Government to the European Commission, there is a risk that Magurele Laser can no longer… Mai mult

Romania joins countries that recognize Juan Guaidó as interim president of Venezuela

The Presidential Administration announced on Friday that President Klaus Iohannis, "as the head of Romania’s foreign policy decisions and Romania's representative at the external level,… Mai mult

AmCham Romania: Counterproductive public policies have reched an alarming level

Further to the message on the impact of OUG 114/2018 transmitted on Thursday to the organizations in the Coalition for Development of Romania (CDR), AmCham… Mai mult

Finance minister stopped borrowing money from the market. Teodorovici: We have funding resources for minimum six months

Minister of Public Finance (MFP), Eugen Orlando Teodorovici, has ordered to stop borrowing operations on the market because MFF would have all the money needed… Mai mult

BNR: If we sold foreign currency to defend Romanian leu, as PSD wants, interest rates would explode and ROBOR would go over 5-7 percentage points

The National Bank of Romania wants a "loyal cooperation" with the Ministry of Public Finance, and that involves a prior consultation with the central bank… Mai mult

Tax on bank assets was not included in 2019 draft budget

The tax on bank assets was not included in the 2019 draft budget, published on Thursday evening by the Ministry of Public Finance (MFP). According… Mai mult

Eruption on foreign exchange market: Mechanism of spiralling depreciation. Euro - sudden surge to 4,759

The average euro exchange rate, calculated by the National Bank of Romania (BNR), suddenly climbed sharply to a new record level of 4.7569 RON /… Mai mult

ANAF starts controls at large taxpayers. Mission stated: Combating phenomenon of externalisation of profits

The National Agency for Fiscal Administration has publicly announced the start of the "Iceberg" operation - a large fiscal control action targeting big companies operating… Mai mult

It becomes increasingly harder for the state to borrow: Finance Ministry has attracted only a quarter of targeted 400 million

The Ministry of Finance (MFP) has only managed to sell five-year government bonds amounted to RON 110 million out of the RON 400 million issued… Mai mult

"Perfect storm" that "calls for a crisis": Bankers - about "greed ordinance"

The most important bankers in Romania say that the effects of the tax on greed will be very serious and difficult to repair over time.… Mai mult

Increasing energy price - miners' strike brings imports up to 16% of consumption

  Rovinari power plant, part of Complex Energetic Oltenia, closed one of its energy groups on Wednesday night because of the lack of coal, as… Mai mult

A flow of initiatives against compensatory appeal: 188 of detainees released committed robberies, rapes, crimes

USR will file on Monday a bill on repealing the compensation appeals law, based on which thousands of detainees were released from prison before completing… Mai mult

Mugur Isarescu: "Ordinance weird thing" reduces monetary policy efficiency, which will not help Government

The National Bank of Romania (BNR) will convoke the National Committee for Macro-prudential Supervision, where the Ministry of Finance will be required to clarify the… Mai mult