In 2024, Moldova will see an explosion of consumer lending: confidence in the banking system is recovering after the price crisis of 2022-2023, - Veaceslav Ionita
This was stated by an expert from the Institute for Development and Social Initiatives (IDIS) Viitorul, presenting his weekly economic analysis. According to him, in the 3 quarters of this year, Moldovan citizens received loans worth 10 billion lei and by the end of the year this amount will grow to 14 billion lei. He noted the increase in the number of consumer loans granted by banks to individuals. In the 3 quarters of 2024, this is almost 150 thousand loans, while in the previous few years the number of loans ranged from 66 thousand in 2017 to 132.2 thousand in 2021. Statistics for the last 15 years show that Moldovan citizens prefer to take loans in the warm months of the year. As for new consumer loans, from 2015 to 2023 their volume increased from 2.3 billion to 9.5 billion lei, and in the 3 quarters of the current year they amounted to about 10 billion lei. "Moldovans borrow 3 times more money compared to 2 years ago. People are restoring confidence in the banking system after the price crisis of 2022 and 2023. Interest rates are falling, and people are starting to forget that prices were so high. 2024 will be an explosion of consumer lending," the economist said. Speaking about the share of consumer loans in total household expenses, the economic analyst noted that in 2015, loans covered about 5.9% of household expenses, and in the 3rd quarter of 2024 - 14.7% of household expenses (excluding food expenses). According to Veaceslav Ioniță, the average size of a consumer loan in 2015 was 50.9 thousand lei, in 2023 – about 77 thousand lei, and in the third quarter of 2024, in annual terms, the average loan amounted to 67 thousand lei. To repay a consumer loan in 2015, a family needed about 13.6 monthly salaries, in 2023 – 6.7; and in the third quarter of 2024, in annual terms – 5.7 monthly salaries. "Currently, salaries are growing, and the cost of loans has practically not changed, so the burden on families is more than 2 times lower than in 2015. Incomes allow us to cover loans. Loans are growing, although the interest rate is still higher than in 2021," the expert said. As for the average weighted interest rate on consumer loans in lei, in 2015 it was 5.5%, in 2023 in the first quarter – 16.4%, and in the fourth quarter – already 12.3%. In the third quarter of 2024, the rate was 10.5%, and the expert believes that by the end of the year it will fall below 10%. Speaking about the balance of consumer loans in banks, the economic analyst noted that in 2000 it was 100 million lei, in 2005 – 800 million lei, in 2022 – 10 billion lei, in 2023 – 11.2 billion lei, and in the third quarter of 2024 – 13.9 billion lei. "By the end of the year, Moldovans' debt to banks will reach 15 billion lei," the economic analyst calculated. The level of population debt on consumer loans in relation to GDP in 2000 was 0.4%, and in the third quarter of 2024 it will reach 4.4%. "The historical record will be reached in the fourth quarter. Taking into account other types of loans - for real estate, for business, from microfinance companies, which Moldovans take out, the most likely level of Moldovans' debt will be 14%," the expert believes. Veaceslav Ioniță notes that, after the restrictions caused by the monetary policy of the National Bank, when consumption was not encouraged, including through lending, and savings were encouraged, lending is now returning. "Interest rates are falling, and Moldovans are gaining access to more and more loans. They use consumer loans as a mechanism for financing household needs," the economist noted. // 01.11.2024 — InfoMarket
