Citizens of Kosovo increase their requests for loans for the purchase of houses and for consumption

Citizens of Kosovo have increased their requests to receive loans for the purchase of houses and loans that have been used for consumption.

This is what the report says "Bank lending survey, number 16", presented by the Central Bank of Kosovo (CBK), adding that commercial banks in the second quarter of 2023 have increased the approval rate of loans for family economies.

"Five banks, three of them systemically important, reported an increase in the demand for loans for the purchase of houses, while six banks, three of them systemically important, declared an increase in the demand for consumer loans", says the survey, writes Telegrafi.

According to CBK, this growth has been positively influenced by the favorable perspective of the real estate market.

"The factors that positively influenced the dynamics of loan demand were the need to finance consumption expenses (positive index 0.34) and at a lower level, the perspective of the real estate market (positive index 0.19) also had a positive effect," says CBK.

The survey points out that in the next quarter, the quality of the credit portfolio of households will deteriorate.

"During the third quarter of 2023, banks expect the quality of the credit portfolio of households to deteriorate further, based on the positive value of the index. Precisely, the banks' expectations for the ratio of non-performing loans resulted in a positive index of 0.17, declared by three banks, where two of them are banks with a high weight in lending and of systemic importance", the report continues.

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Banks have also reported increased access to financing for this quarter.

"Banks reported an increase in access to financing during the second quarter of 2023. The aggregated result of the banks' responses was based on the responses of seven banks (four of them systemically important banks) which declared an increase in financing, while two of the banks declared a decline in financing (one of the banks was of systemic importance). For the next quarter, in general, banks expect an increase in the total access to financing to a higher extent than that of the current quarter with a positive index of 0.45", the survey points out.

In terms of credit financing for businesses, the highest financial institution in the country says that the demand for credit increased at a lower level than in the first quarter of 2023.

"During the second quarter of 2023, the demand for loans by enterprises showed growth at a lower level than in the first quarter of 2023. To be precise, the answers generated a positive index of 0.31 expressed by six of the ten banks participating in the survey . In addition, the demand for loans turned out to be higher compared to the banks' expectations for Q2 2023 expressed in the previous survey", states the CBK, Telegrafi reports.

It is further stated that commercial banks do not expect significant movements in the demand for loans from businesses during the next quarter.

"This result was influenced by the responses of seven banks, of which three banks (two of systemic importance) declared a decrease in the demand for loans in general and four other banks (one of systemic importance) that declared an increase in the demand for loans from enterprises. The demand for financing fixed investments is expected to decline during the third quarter of 2023, and the demand for financing inventories and working capital is expected to remain unchanged. At the same time, the quality of loan applications received is not expected to have significant changes", the report continues.

The support of businesses in lending by the Kosovo Credit Guarantee Fund (FKGK) is said to have played a key role in easing credit standards.

"The factor that to some extent positively affected credit standards, providing security to the sector
banking, was supported by FKGK with a positive index of 0.21. So, the support from FKGK and the perceived low risk in the real estate market positively influenced the conditions and rules applied. Whereas, the support from FKGK, the higher tolerance to risk and the pressure of competition among banks positively influenced the expectations of banks on conditions and rules during the next quarter", the survey shows.

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Finally, banks have reported that there is expected to be an increase in non-performing loans for businesses and households.

"Four banks, two of them with systemic importance, expect an increase in non-performing loans of enterprises, compared to three banks, also two of them with systemic importance, which expect the same dynamics for non-performing loans of family economies". concludes CBK. /Telegraph/