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High interest rates, guarantees and bureaucracy, companies’ main obstacles in getting loans

The main problems faced by the companies in Romania continue to be the high taxation, fiscal environment unpredictability and competition, as well as the access to finance, a survey on the access to finance of non-financial companies in Romania, carried by the National Bank of Romania (BNR) reads.

“It was also noticed an increase of the number of companies that consider the availability of the labour force a pressing issue compared to the previous report,” the survey also reveals.

Referring to the access to finance, the percentage of the companies for which this is a stressful problem, has grown as reported to the previous period (16 percent of the companies).

“If analyzing only the companies that have attempted to access a loan April-September 2016, a slightly reduced proportion of those identified as pressing the access to finance (17 percent as compared to 18 percent in the previous exercise),” the document says.

As for the major difficulties the companies do face in accessing a loan from the banks and/ or the Non-Financial Institutions April-September 2016, the first place was taken by the way too high rates and fees, the requirements on the value or kind of the guarantee, and the red-tape.

So, the domestic finance (profit reinvestment /sale of assets, loans from shareholders or capital increases, respectively) are the main source of finance for around 64 percent of the interviewed companies.

Moreover, the intention of most of the companies is to cut their bank indebtedness, so that 59 percent of them would not ask for a loan in the national currency and 65 percent would never ask for a loan in euro, no matter the interest rates. Proportions are a bit higher as compared with the previous half year (57 percent and 62 percent, respectively, in October 2015 – March 2016).

The same study also shows that the banks have significantly eased the standards for mortgage loans to households in Q3 of this year, after two consecutive quarters of tightening. The relaxation trend is expected to continue in Q4 too, but with lower amplitude.

The research was carried on 10,500 nationally, regionally represented non-financial companies.

 

About Anca Bernovici