CONSUMPTION GROWTH SNAPS MOLDOVAN BANKING SYSTEM OUT OF TORPOR - IDIS VIITORUL

Consumption growth progressively snaps the Moldovan banking system out of the torpor, said expert Veaceslav Ionita from the "Viitorul" [Future] Institute for Development and Social Initiatives (IDIS).

The expert stressed in his research that the volume of provided loans, which has been declining over the last two years, has finally shown a growth: in the second half of 2018, the volume of credit financing increased by 792 million lei, compared with the first six months of the year.

"The growth of volumes is caused primarily due to the expansion of consumer and mortgage lending, which provided more than 50% of the growth. That is, citizens become the driving force in the banking system recovery", the expert said.

At the same time, he stressed some negative factors, in particular, the volume of loans to the real sector is declining (the decline amounted to at least 452 million lei).

"Despite the growth of loans, the pre-crisis loan volume indicators have not been achieved" added the expert, drawing a conclusion that the reduction in the share of loans is a direct reaction of economic agents to the crisis.

Compared with 2014, the loan portfolio of construction companies decreased by 912 million lei, while the volume of mortgage loans increased by 861 million lei.

"The Moldovan banks prefer to provide citizens with loans and not the business environment, because namely individuals are conscientious players: the volume of unreliable loans among citizens does not exceed 3-3.5%, while among economic agents it is 15-16%", the expert said.