SIMILAR ARTICLES

IMF report – Conclusions show that Romania has become a new and atypical growth model: through imbalances. Which will soon get to be paid

Romania’s macroeconomic imbalances have increased in the past year, and economic and fiscal policies have to change so that the population’s incomes and prospects of… Mai mult

Discharging imbalances on RON exchange rate could start even this year. Analysts’ scenarios and BNR’s uncertainty

Analysts’ scenarios on the evolution of the exchange rate are rather prudent for the coming months, but severe for the beginning of the next year… Mai mult

Stimulating over-indebtedness by stimulating consumption: Overdue loans trigger warning signal – Map of debtors

The policy of stimulating consumption has also distorted the degree of indebtedness in the territorial distribution, and rich counties are competing with the poor ones… Mai mult

Interview with Fogh Rasmussen: “NATO’s role is to keep Russians out, Americans in and Europeans involved”

The text below is a series of fragments from the interview that former NATO Secretary General Anders Fogh Rasmussen gave to CRONICILE Curs de guvernare… Mai mult

Gas and electricity prices: Romania in a European context

Romania ranked fourth in the second half of last year in the EU in terms of price increase in natural gas provided to the population,… Mai mult

Cronicile

BNR: Level of interest rate tolerance for companies

de Adrian N Ionescu , 27.12.2017

The fear of future interest rate increases makes most entrepreneurs wish to reduce their indebtedness, according to the survey of the National Bank of Romania (BNR) on the access to financing.

The proportion of entrepreneurs who want to reduce the debt rate of their companies has risen both for loans in lei, to 62% of the total (from 59% in the spring) and in euro, to 66% (65%).

The corporate reaction comes in the context of an already low rate of financing by loans, despite the increase in the volume of loans in recent times, and of an appetite of companies for loans that did not increase during the period when interest rates were low.

“Most of the companies surveyed consider they do not need financing from banks or other non-banking financial institutions (63%, similar to the previous survey),” says BNR’s summary of the survey results.

The BNR survey included September when the average rates (ROBOR) of the interbank interest exploded. In the meantime, ROBOR rates have declined considerably only for the immediate maturities, in the last two weeks: from 2.16% to 1.27% for one day, but appear to have been capped temporarily, at high levels for maturities longer than one month.

*

  • Evolution of average interest rates (ROBOR) over the last three years

*

3 and 6-month ROBOR, based on which the debt burden is calculated for most of the loans, has corrected only to 2.11% and 2.31%, respectively, compared to the maximum levels of 2.22% and 2.35 % on December 5.

Banks are to recalibrate their lending strategies as of January when the effect of the increase in the interest rates will be fully seen in the market.

Resistance to interest rate increase

Entrepreneurs believe that their firms could no longer withstand an increase in the interest rates by more than 3 percentage points.

“The capacity of companies to cope with unfavourable developments in interest rates is low and an increase of up to 3 percentage points in the interest rate on both RON and EUR loans would significantly affect the company’s activity and/or the capacity to repay the loan in the case of over half of the respondent companies,” says the summary of the BNR survey.

*

  • Average interest rate for loans in lei, for the non-financial companies that have loans in lei, September 2017
  • Non-financial companies’ perception of the impact of possible future changes in the interest rates for loans in lei, in September 2017
  • An increase of up to 1 percentage point would affect you              An increase by 1-3 percentage point would affect you                An increase by 3-5 percentage point would affect you     No increase in the interest rate for loans in lei would affect you            The existing level of the interest rate already affects you The increase in the interest rate does not affect you but the decrease

*

More precisely, for 37% of the firms that declared they need financing, 2% is the maximum interest rate at which they would be willing to borrow lei, while 29% of them would accept a loan in lei at an interest rate of maximum 4%.

Only 12% of companies would accept a loan with an interest rate between 2 percent and 4 percent.

The average interest rate for loans in RON stood at 3.9% in September 2017.

The maximum acceptable interest rate for loans in euro is 1.5% for 41% of the firms that need financing, while another 21% would accept a maximum interest rate of 1.5% to 3%.

Only 9% of companies claim to be willing to contract a loan with a maximum interest rate between 1.5% and 3%. The average interest rate for loans in euro was 2.4% in September 2017.

In September 2017, loans in lei contracted by 40% of the companies had an average interest rate of 3 – 5%. Companies that have accessed euro-denominated loans are mostly financed at an interest rate between 2% and 4%.

Biggest problem: taxation unpredictability

However, entrepreneurs’ low appetite for lending does not make the surge in interest rates change the hierarchy of the most pressing problems faced by firms. Similar to the previous period remain the following: high level of taxation, the unpredictability of the tax environment and competition.

The access to financing ranks second to last by the magnitude at which the firms see it as a pressing issue.

*

  • The most pressing issues for SMEs and corporations, between April- September 2017
  • Taxation level  Unpredictability of the tax environment Competition Lack of demand          Costs (production, etc.)     Availability of skilled workforce          Regulations     Payment discipline in the economy   Access to financing         Insolvency proceedings
  • Note: Question is based on a scoring scale (from 1- very pressing issue to 5 – lesser pressing issue), where only the “pressing” attribute has been considered (scores 1 and 2).

*

“As compared to the previous survey (March 2017), notable changes are in terms of the increase in production costs and the availability of skilled workforce and the decline in the lack of demand”, says the summary of the BNR survey.

Only 14% of the companies have estimated that the access to financing is an issue with a high impact on the firm’s activity (a marginal increase compared to the previous semester when this aspect was mentioned by 13% of companies).

“Firms with bad loans feel the problems more acutely than firms with performing loans. A significant gap is noted in the access to financing topic (40% vs. 14%) and the own insolvency or trading partners’ insolvency (32% versus 13%).

The sample used in the survey comprises about 11,000 non-financial companies, is representative at national and regional level and the selection of surveyed companies is made by specific statistical procedures in compliance with criteria regarding (i) company size category (micro-enterprises, small enterprises, mid-sized enterprises and corporations); (ii) field of activity (according to CAEN Rev. 2) and (iii) development regions, according to BNR.

Mergeți în homepage ›

Publicat la data de 27.12.2017

Lăsați un comentariu


NEWS

ANAF changes selection procedure for liquidators. Main changes

The new order on approval and selection procedures for insolvency practitioners is an important step to a very good direction, industry experts say. ANAF is… Mai mult

Romania loses competition for a seat at UN Security Council. MAE Excuse: Campaign started too late

Romania lost to Estonia in the final vote to get the non-permanent member position within the UN Security Council for the period 2020-2021. On Friday,… Mai mult

Business internationalization / eMAG makes a step to entry five new international markets and targets a business of EUR 2 billion

eMAG hopes to get the opinion of the Hungarian Competition Council over the next two months for the acquisition of Extreme Digital, the market leader… Mai mult

"At a distance from books": 85,000 teachers (one third of educational staff) are graduates of distance learning

Approximately 85,000 teachers are graduates of distance learning (ID) programs, Education Minister Ecaterina Andronescu said at a meeting with school inspectors from Caras-Severin County. The… Mai mult

Mugur Isarescu: We should make a film for Viasat History about treasure in Moscow

A book should be written or a movie should be made and sent to Viasat History about a treasure evacuated to Moscow, as it is… Mai mult

Rhythm of commercial vehicle registration increases 3 times faster in Romania than EU average

Today, the European Automobile Manufacturers Association (ACEA) announced the status of commercial vehicle registrations in EU member states + EFTA in April and cumulated after… Mai mult

4.2%, from 3%: BNR has increased inflation forecast for 2019

The National Bank increased the inflation forecast for 2019 by 1.2 percentage points, from 3% to 4.2%. Also, the forecast for 2020 goes up by… Mai mult

Emergency procedure at European Court of Justice for Romania’s question: Are MCV recommendations mandatory?

The Court of Justice of the European Union (CJEU) has decided that Bihor Court’s request to be discussed under the emergency procedure, which is a… Mai mult

Government decides to increase external borrowing ceiling by EUR 4bn. It has consumed program resources for two years

The Government's agenda for Wednesday also includes the draft decision to increase the foreign loans ceiling for 2019 and 2020 by EUR 4 billion, up… Mai mult

Preparations for Summit in Sibiu - European Commission’s recommendations for EU's strategic agenda

On Tuesday, the European Commission presented a series of policy recommendations on how Europe can shape its future within an increasingly uncertain and multipolar world.… Mai mult

Meeting between Prime Minister Viorica Dancila and Chinese Prime Minister Li Keqiang: talks on a possible involvement of Chinese companies in PPP projects in Romania

On Friday, Prime Minister Viorica Dancila had a meeting with Chinese Prime Minister Li Keqiang, during which she stated her interest in involving Chinese companies… Mai mult

So-called "Belina Law" was adopted. Opposition will refer CCR: it turns Belina Island into a fiscal paradise

The Chamber of Deputies adopted on Tuesday the bill that provides for a derogating tax regime, such as tax exemptions or reductions, for land and… Mai mult

Deveselu shield is undergoing an upgrade process; the US provides alternative defence capabilities with THAAD systems

Aegis Ashore anti-missile system installed at Deveselu 99 Military Base will go in the next period through a previously planned upgrade process, the MApN announced… Mai mult

How 2019 began: Investments, allocations by 78.5% lower than the same period of 2018. 21% decrease in co-financing for attracting European funds

The consolidated general budget recorded a deficit of 0.5% of GDP in the first two months of 2019 namely RON 5.2 billion, a "performance" only… Mai mult

Romania's GDP exceeded Portugal’s in 2018: which has a population two times lower and a GDP/inhabitant twice as high

Romania's economy exceeded, at current prices in euros, Portugal's economy in 2018, a country with a population and a surface two times smaller as Romania.… Mai mult