Individuals' overdue payments on small loans in November climbed to 268 million RON (the equivalent of a little more than 78 million euros).
Against November 2005, the volume of outstanding payments rose by almost 76% (68% in real terms). The volume soared by 4.6% last November alone, after having added 10% in October. Despite the still noticeable upward trend, there were some declines in the overdue loan repayments reported by banks in 2006, though, with the latest correction dating back to September.
The NBR monitors separately the trend of overdue payments on loans of below 20,000 RON (the equivalent of 5,800 euros) contracted by the individuals.
However, the annualised growth rate of these overdue payments shrank considerably during 2006. Last January, the volume was still registering annual growth by 134%, in nominal terms. The slowdown is accounted for, however, by the fact that the basis of comparison expanded meanwhile.
The largest part of overdue payments is made up of debt related to RON-denominated loans, which continued to amount to about 87% of the total. In late November, overdue payments for RON-denominated loans totalled 233 million RON (68 million euros), 75% higher than in the similar month of 2005.
The volume of overdue payments for euro-denominated loans had the fastest growth: the volume doubled, climbing to 31.7 million RON (9.2 million euros). The faster pace is accounted for, however, by the low basis of comparison.
Debts related to dollar-denominated loans shrank, by 16% between November 2005-November 2006, to 3.37 million RON (less than 1 million euros).
On the other hand, the volume of dollar-denominated loans also decreased over the past year, with the US currency falling out of grace in terms of lending.
Despite the significant increase of overdue payments in November, the number of persons reported as having unpaid debts by banks in the system slightly decreased. Thus, in November a number of 289,807 customers were more than 30 days late with repaying loans, compared with 291,728 in October. Compared with November 2005, the number of persons registering debts rose by almost 30%. The number of overdue payments advanced even more slowly, climbing by 29% during this time interval, to 358,581.
According to the NBR data, sums banks no longer expect to recoup make up the largest part of overdue payments. Standing at 177 million RON, these account for almost 70% of the total. The NBR started collecting information on small loans granted to individuals back in August 2004. Starting the end of last year, the NBR no longer asks banks for such information, but takes it directly from the Credit Bureau.
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