SIMILAR ARTICLES

Labour tends to zero in terms of contribution to potential GDP. When employment rate increases but does not converge

The employment rate of Romanian population aged between 20 and 64 years was 68.8% last year, according to data released by Eurostat. This figure was… Mai mult

Convergence of wages versus price convergence

The living standard in Romania increased significantly due to an accelerated wage convergence compared to the EU average and the stagnation in price convergence toward… Mai mult

BNR raises inflation forecast for 2019 to 2.9%. Among risks: “unpredictably” administered prices

The National Bank of Romania (BNR) has maintained the inflation forecast for the end of 2018 at 3.5% but has raised the forecast for 2019… Mai mult

Serious problem of wealth distribution in society: How Romanians came to having lowest median income in EU

Eurostat has published the most recent data of EU member states on median net income by household. Romania ranks last in 2017, with only EUR… Mai mult

Adapting pensions to economy and society – Romania’s position within international context by four benchmarks

According to OECD data, net pension wealth in Romania (calculated for 2016) was 8.3, a value significantly below the average of 12.3 recorded at the… 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

Development strategy / Government squeezes even investment money from its own companies: EUR 120 million from only two entities in energy field

Nuclearelectrica (SNN) and Romgaz (SNG) have calculated the additional dividends to be paid to the state after the Ministry of Finance (MFP) sent to the… Mai mult

DNA, officially: Senate President is suspected of having received a USD 800,000 bribe. Case file opened at a request from Austrian judicial authorities

The case file in which the DNA requested the waiving of the Senate President’s immunity was opened at the request of Austrian judicial authorities and… Mai mult

Illegal state aid / European Commission demands Romania to recover EUR 60 million from CE Hunedoara

Romania has to recover illegal state aid worth EUR 60 million granted to Compexul Energetic Hunedoara, announced the European Commission with a statement released on… Mai mult

Ministry of Finance planned loans of RON 4.74 billion in November. Costs are increasing

The Ministry of Public Finance (MFP) intends to borrow in November RON 4.74 billion, 1.4% more than in the previous month, according to the Ministry.… Mai mult

New 100% Romanian tractor has been launched. Features, endowments, price

IRUM Reghin launched the first 100% Romanian tractor, announced Digi24, designed and built by the company’s engineers, 15 years after the Romanian tractor manufacturing disappeared.… Mai mult

Romanians from abroad sent as much money to Romania as Government attracted from European funds and subsidies

Romanians working abroad sent EUR 2.695 billion to the country in the first eight months of 2018, equalling the European funds and subsidies received in… Mai mult

Bucharest Stock Exchange: European record increase of reference index, old liquidity issues

The main index of the Bucharest Stock Exchange (BVB), BET, registered the second highest increase in the European Union (8.5%) in the first nine months… Mai mult

Estimates of Capital Economics: GDP is losing speed in Q3 as well, growth could be reduced to 3.5%

The first estimate of the economic growth in Romania in the third quarter shows a reduction down to 3.5% (year-on-year), after the previous quarter's Gross… Mai mult

Mugur Isarescu - BNR: Wages should increase by market forces not by politicians

Wage increases should be based solely on productivity growth and be made "by market force", not by politicians, the Governor of the National Bank of… Mai mult

OMV postpones decision to assume an investment in natural gas from Black Sea for next year

Austrian OMV Group postponed its decision on the Black Sea investment for next year, in the context of the offshore law adoption being postponed, Reuters… Mai mult

Justice Minister initiated procedure for dismissing General Prosecutor

Minister of Justice announced on Wednesday that asks for the dismissal of General Prosecutor Augustin Lazar (photo) for 20 reasons (they could be more, Tudorel… Mai mult

Eurobarometer / Romanians who believe that EU membership is a good thing have lost majority position

  The last Eurobarometer of the European Parliament, published in September, shows that 49% of Romanians consider that EU membership is a good thing. Compared… Mai mult

PSD announces consensus with ALDE on offshore law: 50% of production is sold on Romanian commodity exchange, maximum 30% deductions for operators

PSD and ALDE reached consensus on amendments to the offshore law, the leader of PSD deputies Daniel Suciu announced on Wednesday evening and said that… Mai mult

Siegfried Muresan asks for EUR 2 billion from EU post 2020 budget to defend rule of law

MEP Siegfried Muresan (PPE / PNL) has submitted this week an amendment to the European Parliament's interim report on the EU post-2020 multiannual budget and… Mai mult