Only one in 25 companies was registered as scheduled for taking a loan over 200 million lei, that is $6,600 from a bank in Romania at the end of June.
The banks and the economy remain separated by a wall made of high interests, outrageous collateral and mentality.
The two sides, namely the real economy and the banking system, have little to do with each other, which is shown by several things: salaries, headquarters and the data with which they operate.
On one side of the wall, there is air conditioning and salaries three times higher than those in the rest of the economy – $270 was the average salary in late June. On the other side, 500,000 companies fuss around and only one in 25 climbs up the wall and grabs a credit.
The Banking Risk Central (CRB) within the National Bank of Romania says the banks have only 21,156 “active” companies and natural persons borrowing money. The rest is made up of depositors.
The National Trade Register Office still has 507,706 companies in the Romanian economy recorded in its books, although having recently struck off one third of them for failure to increase their share capital.
How can this be?
“Even in horror movies the credit-granting conditions are better than with the banks in Romania. We tried applying for loans with the foreign banks, but they would not pay attention to us. The banks that can lend lots of money, such as Banca Comerciala Romana (Romanian Commercial Bank-BCR) and Banca Romana pentru Dezvoltare (Romanian Development Bank-BRD), charge high interests. Collateral requirements are somewhat not that harsh, but those for getting an investment credit are really burdensome. Get the interests low, or else Romania will never do well! As for investment credits, the law should cap the interests to 15%,” says Gheorghe Mois, chairman of the Castrum Corporation, which deals in civil and industrial constructions, energy, gas supplying and taxicab business.
The interests for credits have never gone below 45% per year so far, as neither are they likely to do so some time soon.
Starting June last year, each bank is required to report all the credits higher than 200 million lei to CRB, which accounts for over 90% of the total banking credits granted. According to CRB’s reports, 21,156 companies and natural persons had at least one over 200 million lei loan taken.
At a closer look, the data provided by CRB show that 2,159 of these have one or more credits, which leaves some 19,000 companies or natural persons with only one loan.