In Moldova in 2018, was observed an unprecedented growth in the issuance of mortgage loans.
This was stated by President of the National Bank of Moldova Octavian Armasu in an interview with Moldovan media, noting that interest of citizens in the mortgage increased significantly last year amid lower interest rates on loans, the launch of state support programs, etc. Octavian Armasu said that the increase in demand for mortgage loans are due, among other factors, to the implementation of the state program Prima Casă with various social benefits, which provides for the possibility of obtaining loans for the purchase of their own homes by Moldovan citizens in the age of those between 18 and 45 years old. As of November 30, 2018, loans provided for the purchase / construction of real estate amounted to 3.8 billion lei (10.7% of the sector loan portfolio), having increased from the beginning of 2018 by 1.2 billion lei (+ 44%). “We must also take into account the low historical level of mortgage lending in Moldova. The rapid growth of mortgage lending was also due to a small comparative base. In countries comparable to Moldova, the level of mortgage loans is much higher: in Lithuania mortgage loans make up 37% of the portfolio, and in Georgia - 56%,” said Octavian Armasu. According to him, mortgage loans traditionally are among the least risky loans in the banks' portfolio, so the share of unfavorable loans in the total number of mortgage loans is currently 4% compared to the average share of unfavorable loans for the entire sector at more than 13%. The head of the National Bank noted that the NBM as a regulator performs the function of monitoring and preventing risks that may arise as a result of excessive lending. Thus, in the course of its inspections, the NBM selectively checks mortgage loans in order to prevent the occurrence of significant risks. At the same time, licensed banks develop appropriate policies for the provision of mortgage loans and effectively apply it in their lending activities. “Lending is beneficial to both parties with a cautious approach, both from clients and banks,” said Octavian Armasu. // 14.01.2019 — InfoMarket.