Overdue loans gain ground

Even though bankers will almost never admit they are having trouble collecting the loans granted, figures reveal the volume of overdue credits is getting larger month by month. The latest official data released by the central bank show overdue loans reported by commercial banks went up 12%-13% on the average in August alone. The short-term loans rated as overdue amounted to 1,734bn ROL in late August, up 12% from July, while medium and long-term overdue loans rose 13.59% to 224bn ROL. The fiercer competition among banks and the market share battle implicitly have resulted in the lending terms being so loose that they are now more or less turning against banks. Compared to August 2002, the volume of short-term loans registered as overdue has gone up 23.59%, while medium and long-term financing registered as past due payment date is over 300% higher. Medium and long maturities used to be quite a rare occurrence in the banks’ portfolios until this year, which explains why the increase in the medium and long-term overdue credits is so serious. ZF