The decline accelerated in the last year and a half, when 800,000 loans were closed because they were consolidated into refinanced loans, were repaid in full, or were removed from balance sheets due to non-payment.
At the end of August, individuals had 3.5 million ongoing consumer loans left, 27% less than in December 2010, when the volume of funding was nearly RON74 billion (EUR17.2 billion).
In August, outstanding consumer loans amounted to RON62.5 billion (EUR14.5 billion), which results in an average amount of nearly RON18 million (EUR4,200) per loan.
“The maturity is much shorter for consumer loans and many contracts ended naturally. Demand has been much lower in the last two years, so amounts repaid exceeded new loans,” Liviu Andrei, general manager of credit broker Alliance Finance, commented.
“Other loans were consolidated into one. Around 70% of those asking for a refinancing have at least two loans,” Andrei added.
Consumer loans could be dealt a blow, considering that the National Bank of Romania or NBR is currently preparing a new regulation seeking to restrict consumer loans by reducing the repayment period to a maximum of five years and by raising the collateral that clients need to pledge to 133% of the loan value.
The overall number of ongoing retail loans was 7.2 million at the end of August, down from 7.8 million in March last year, according to data from the Credit Bureau. The institution has data on 6.5 million debtors and receives from banks and NBFIs both positive data (the value of loans granted) and negative data (loans in arrears). (EUR1=4.2984)
(English version by Daniela Stoican)