Romanians are finding it increasingly hard to pay their monthlyinstalments to banks, which now account for 22.4% of thepopulation's available income in September last year, compared witharound 5% at the end of 2004, reveal data from the NBR (NationalBank of Romania).
The high indebtedness level and expected continued incomeadjustment will not allow lending to individuals to be resumed veryquickly despite the monetary relaxation signals sent by the NBR,putting more pressure on overdue loans, which trebled in 2009.
"The population's ability to repay loans continued todeteriorate, which could lead to a rise in the percentage ofoverdue loans in the future as well, according to Ion Dragulin,manager of the Financial Stability Department of the NationalBank.
Romania's debt-to-income ratio is one of the highest in Europe,considering the average rate of 11% in the eurozone. Under thecircumstances, lending to individuals could continue to stagnate inthe coming period, with the banks relying on corporate loans and onco-funding for EU-backed projects this year.
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