100,000 firms and persons with big loans are late in paying instalments

100,000 firms and natural persons with loans worth above 20,000 RON were late in paying their bank instalments during May 2008-May 2009 period, as a result of the economic crisis. Thus, the number of persons holding loans worth above 20,000 RON who are late in paying their instalments doubled in just one year, getting to over 200,000, in line with data published by the NBR. Practically, in just one year the number of such persons came to match the level of the past 19 years. "Companies registered sales declines and thus their balance was hurt and natural persons enjoyed no more income raises, even posting declines. The unemployment rate, plus interest rate and exchange rate increases ate into the natural persons’ budgets. There were several factors that worsened the situation," considers Raiffeisen Bank’s chief-economist, Ionut Dumitru. The value of provisions set by banks in H1 rose from 7.59bn RON (1.8bn euros) to 11.3bn RON (2.7bn euros), but in June posted the first monthly drop of the past two years and a half, down 2.6% from May.