Romanian Bks Expect More Restrictive Lending Terms For Cos In 4Q

"The lending standards became more restrictive. The expectations for the fourth quarter are tougher lending standards, especially for long-term loans. The small and medium sized enterprises SMEs faced more restrictive lending standards than the other large companies from the second quarter of 2008," according to a survey among lenders, published by the central bank Friday.

The banks said the factors contributing to this situations are the risks related to the collateral, to the companies’ business line and the central bank’s monetary policy.

Bankers said the risks associated to companies and corporations are increasing, correlated with the euro-zone which mirrored a negative perception on the lending risk since last year.

Also, the terms for the lending contracts equally toughened. Thus, the guarantee demand has been highly revised over the last two quarters, the lending costs have increased, the premium for riskier loans is higher and the average interest rate spread of the loan related to ROBOR rate equally increased.

Also, the maximum threshold for the loan value is lower, the contract terms are more restrictive and the maximum maturity of loans grating is lower.

Thus, the lending rate decreased in the third quarter compared with the previous quarter.

Lenders expect a sharp decrease in long-term loans demand, on the backdrop of higher interest rates, while the short-term loans demand is seen flat, on financing needs.