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24 March 2017, 12:52

Lower refinancing rate to invigorate Belarusian lending market

MINSK, 24 March (BelTA) – The reduction of the refinancing rate by the National Bank of the Republic of Belarus can considerably invigorate the lending market, Belagroprombank representatives told BelTA.

The reduction of the country's key lending rate has positively affected lending terms, reducing the cost of borrowed money, BelTA has been told. In turn, the less expensive resources can considerably invigorate the market of consumer loans.

At present Belagroprombank offers loans for building or buying homes and apartments, loans for housing bonds, for refinancing real estate loans with the interest rate of 19% per annum (the NBRB refinancing rate + 4 percentage points). The interest rate for consumer loans makes up the refinancing rate + 1 percentage point or the refinancing rate + 5 percentage points (16% and 20% per annum respectively) depending on the loan repayment period.

BelVEB Bank is also reducing the cost of its loans. Igor Romanovsky, Director of the Retail Services Development Department at BelVEB Bank, underscored that interest rates on loans for natural persons have been greatly reduced in the last 12 months and demonstrate a strong falling tendency, resulting in an increased interest of Belarusians in loans. While a year ago BelVEB Bank's loans were available at 40% per annum, now the interest rates stand at 15-18% per annum.

This is why in Q1 2017 the volume of consumer loans granted by BelVEB Bank more than quadrupled in comparison with Q1 2016. In Q1 2016 BelVEB Bank granted Br17,000 in real estate loans while so far this year BelVEB Bank has granted Br717,000 in these loans. The demand for consumer loans and for real estate loans has been rising since the beginning of the year due to falling interest rates and falling prices for real estate.

One of the country's top banks — Belarusbank — has also reduced interest rates on loans. “On 21 March we once again considerably reduced interest rates on new consumer loans by an average of 5 percentage points,” Belarusbank representatives stated. Apart from that, interest rates on loans granted as part of previously signed real estate financing contracts (apart from loans granted as part of the housing construction savings system) have been reduced as well as interest rates on consumer loans in Belarusian rubles (by an average of 6 percentage points) and in foreign currency (by 1.5 percentage points).

BelTA reported earlier that the National Bank of the Republic of Belarus reduced its refinancing rate from 16% to 15% per annum on 15 March 2017.

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