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Despite demand, banks resist higher lending

  • 2012-05-10
  • From wire reports

VILNIUS - Though the banks are promising to ease loan conditions to the business sector, the vast majority of companies say they are going to perform their business development without bank loans, reports ELTA. Such tendencies were revealed after carrying out a poll of non-financial companies and commercial banks.
Almost every fifth - 18 percent - of commercial bank employees working in the management sector said that borrowing conditions for business will be eased in the upcoming half-year period. Nine percent of respondents plan to tighten the terms of borrowing.

According to the most recent poll, in the last six months, the majority, 91 percent, said they have not changed the terms of granting loans, while 9 percent are said to have slightly tightened the terms.
In the last half-year the respondents were most careful with giving credit to hotels, restaurants and companies from the real estate and construction sectors.

In the near future, banks are mostly inclined to mitigate the terms for small-scale and middle-scale business. Moreover, they expect that the companies coming from these segments will seek to borrow the most.
Growth in loan demand is expected by almost every second bank, while total loan portfolios, according to the banks’ forecasts, are to increase by 2-6 percent.
According to the survey, in six months the number of companies which are going to use services of credit institutions decreased - from 38.6 percent to 32 percent.

New borrowing opportunities and standards of loans were viewed the most positively by trade companies, while construction service companies said they deteriorated. According to the most recent data, industrial and trade companies were the most active in using the services of credit institutions.
The poll was carried out by company Spinter Tyrimai and the Bank of Lithuania.