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May 12, 2021
ECONOMY FINANCE&BANKING

BNR survey: Credit institutions tighten credit standards in 2017 Q1 for consumer credit

Credit institutions tightened their credit standards in 2017 Q1 for both consumer credit to households and loans for house and land purchase (housing loans), according to a May 2017 bank lending survey conducted by the National Bank of Romania (BNR).

“As for loans to non-financial corporations, lending conditions remained unchanged compared with the previous period, with the exception of short-term loans to small- and medium-sized enterprises, for which they tightened moderately.

Over the next three months, credit institutions envisage credit standards to tighten significantly for consumer credit and marginally for housing loans. Credit standards for loans to non-financial corporations are expected to hold steady in 2017 Q2,” the survey reads.

It also says that in 2017 Q1, loan demand grew considerably for both consumer credit to households and loans for house and land purchase. Demand for loans to non-financial corporations rose marginally.

For the next quarter, banks forecast demand for consumer credit to households, as well as for housing loans to go up. For 2017 Q2, credit institutions estimate corporate demand to increase marginally as opposed to the previous quarter.

“According to credit institutions, house prices went up in 2017 Q1. For the next quarter, banks anticipate this trend to continue. Demand for loans for house and land purchase rose significantly in 2017 Q1, and credit institutions expect it to increase notably over the following three months as well. In 2017 Q1, the loan rejection rate remained relatively unchanged for housing loans,” according to the BNR survey.

BNR says that its survey is conducted on a quarterly basis in January, April, July and October. It is based on a questionnaire (released as part of the May 2008 analysis) which is sent to the top 10 banks. These banks were selected based on their market share in terms of loans to companies and households, accounting for approximately 80 percent of the loan stock.

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