CBBiH: Lending Conditions for Households and Businesses Remain Tightened

SARAJEVO, (Patria) - In the first quarter of 2021, lending conditions for households and businesses remained tightened, but with slightly less intensity compared to 2020, according to the results of the survey on banks' lending activity for the first quarter of 2021 conducted by the Central Bank of Bosnia and Herzegovina (CBBiH).

The published results show that there was no difference in changes for long-term and short-term loans for businesses, and banks cited risk perception-related factors as the main reasons for tightened credit conditions. At the same time, the results indicate a decrease in loan demand for businesses, which is particularly pronounced for long-term loans. Regarding the demand for short-term loans, after a slight increase in the fourth quarter of 2020, this trend changed in the first quarter of 2021, and a lower demand was recorded.

For household loans, a noticeable tightening of credit conditions was observed, especially for real estate financing loans. The reasons are also closely related to banks' perception of increased risk, while on the other hand, banks reported that increased competition in the market forces them to ease lending conditions. Regarding loan demand from households, a very slight decrease was recorded, indicating that demand in this segment is gradually normalizing after an unfavorable trend in 2020, and banks anticipate that demand will slightly increase in the second quarter of 2021.

More detailed explanations and complete results can be found under Statistical Information on the CBBiH website, link https://www.cbbh.ba/Content/Read/8. CBBiH recently launched this research, which aims to collect information and gain insight into the trends in lending standards and conditions of commercial banks, as well as to assess loan supply and demand in Bosnia and Herzegovina, about which the entire public is informed, in accordance with European Union practices.