In Moldova, for a higher degree of protection for borrowers, they will limit the maximum interest rate to 50%, as well as limit the total amount of loan payments.
This is provided for by amendments to the Law on Banking Activities and the Law on Non-Banking Credit Organizations, approved by the Parliament in the first reading, aimed at strengthening the protection of consumers of loans. The author of the bill, chairman of the commission on economy, budget and finance, Dumitru Alaiba, argued his legislative initiative with a very heavy burden for the population of Moldova from credit organizations. Thus, about 450 thousand citizens have loans from non-bank credit organizations, of which almost 200 thousand have overdue payments on loans, including 40 thousand of them, the delay in payments is more than a year. “When a person has an emergency, he/she can easily become a victim of fraud, and a debt of 10,000 lei can turn into 100,000, and this is because sometimes interest rates reach 1700% per annum,” the MP said. According to him, thus, the bill is aimed at limiting the cost of the loan and regulating the principles of assessing the creditworthiness of the recipient of the loan. In particular, the maximum interest rate on loans is planned to be limited to 50%, and it is also planned to provide that all other expenses (commissions, fees, fines, late interest and any other payments), which are included in the total cost of the loan, excluding interest, would not exceed 0.04% per credit day. The document also provides for the obligation of creditors to properly assess the creditworthiness of consumers, using all available information. Otherwise, borrowers may be exempt from paying interest, fees, or other payments to the lender by repaying only the original loan amount. “Our goal is not to destroy non-bank credit organizations, but to eliminate abuses and promote mutual responsibility of the client and the creditor,” Dumitru Alaiba said. The bill is yet to be approved in the final reading. // 17.03.2022 - InfoMarket
