The main companies in electronics and IT retail say banks are open to granting consumer loans because such loans carry a low risk, the amounts borrowed are also low and the lending currency is the Romanian leu.
“Credit-based sales have risen in the past three months and the interest rate cut by BNR helped. The lending market is still difficult for those who want to buy a home, so banks have turned to small-value loans in lei. The problematic loans have been those in exotic currencies,” explains Dan Ostahie, owner of Altex, leader of the Romanian electronics & IT market. The company had sales of EUR254 million last year, up 22% on 2011.
Loans for electronics and home appliances are low- value and are only granted for a few years, unlike mortgage loans, which can extend over three decades.
“Consumer lending is being resumed, but we don’t expect to see a major leap. Before 2008, over 50% of purchases were done through a loan. Now the percentage is somewhere around 20% if we include consumer loans and credit card purchases,” believes Violeta Luca, executive manager of Flanco, another major electronics and IT retailer.
Ostahie had said on a previous occasion that although the so-called “ID-based loan” [a loan granted easily before the crisis] was criticized by the BNR governor and by politicians , it actually had a positive impact on the economy.
Is the credit card the new easy-to-get loan?
“Today there are several forms of lending, from the traditional loan to credit cards. Some credit cards come with a number of interest-free installments,” explains Ostahie, who says the credit card is the new easy-to-get loan.
Dragos Dinu, executive manager of retail chain Domo, says installment sales of electronics and home appliances carry a low risk and are lower priced, so banks are more inclined to grant such loans.
“I have heard of people whose home loans went into default, but not their refrigerator loans. Installment sales have been somewhat revived lately on the one hand because BNR has cut its interest rate and on the other because consumers have finished paying back some of their loans and now want new ones.”
But the executive says these loans will not boom because consumer confidence in the economy has not been restored overnight and Romanians will remain cautious with their higher-value spending.
(English version by Daniela Stoican)