MINSK, 28 March (BelTA) - The role of the banking system in financing investment projects is getting stronger in Belarus, Chairman of the Board of the National Bank of Belarus Roman Golovchenko told the media on 28 March, BelTA has learned.
“It has been repeatedly said that the banking system should provide the necessary amount of money for the development of the country's economy, of course, with a focus on loans for investment projects. The work is done within the framework of the country’s social and economic development plan. Today we are paying special attention to strengthening the role of the banking system in this matter. Our efforts are producing results. According to our statistics, the banks' domestic lending is increasing, especially the share of lending to legal entities. This indicator shows how much loan funds are directed to the real sector of the economy for the implementation of investment projects. Not for current activities, but for investment projects. Since the start of the year, we have seen a 1% increase in the growth of banks' lending to legal entities and more than 2% increase in the share of long-term loans,” said Roman Golovchenko.
The volume of loans issued over the period by the Development Bank, Belagroprombank and Belarusbank amounted to more than Br1.5 billion, up 28%. “The banks finance projects important for the country in various sectors, including agriculture, industry, new technologies and mining. In particular, Belarusbank allocates a large number of loans for the development and modernization of the energy system in order to set up new production facilities. Loans will be soon allocated on the project to launch continuous production of sodium chlorate and hydrogen peroxide at Mogilevkhimvolokno. These chemicals are imported into the country in large quantities for use in the production cycles of a number of Belarusian enterprises. We will produce them ourselves. I would also emphasize a very important project, which will also be financed by Belarusian banks in the near future. This is the high-precision foundry production of cylinder heads and blocks in Stolbtsy using the most modern technologies, which will help us obtain the necessary competencies,” the chairman of the National Bank said.
In his words, all loans are allocated on terms of payment and repayment. “In order for this to be so, the projects must be payable, have an acceptable payback period and the necessary marginality. Therefore, before making decisions on lending, there is a thorough procedure for economic evaluation of projects, validation and so on. This is a so-called multistage expertise. If budget funds or government guarantees are involved in the repayment of certain loans, the state comprehensive expertise is conducted. If the project is purely commercial without government support, but a state-owned enterprise is involved, then sectoral expertise is performed, followed by banking expertise, which is quite demanding to the business plans of projects and stress-tests them. So, in addition to stimulating the lending process, we are also very attentive to the fact that the projects are effective and ensure payback,” Roman Golovchenko said.
“It has been repeatedly said that the banking system should provide the necessary amount of money for the development of the country's economy, of course, with a focus on loans for investment projects. The work is done within the framework of the country’s social and economic development plan. Today we are paying special attention to strengthening the role of the banking system in this matter. Our efforts are producing results. According to our statistics, the banks' domestic lending is increasing, especially the share of lending to legal entities. This indicator shows how much loan funds are directed to the real sector of the economy for the implementation of investment projects. Not for current activities, but for investment projects. Since the start of the year, we have seen a 1% increase in the growth of banks' lending to legal entities and more than 2% increase in the share of long-term loans,” said Roman Golovchenko.
The volume of loans issued over the period by the Development Bank, Belagroprombank and Belarusbank amounted to more than Br1.5 billion, up 28%. “The banks finance projects important for the country in various sectors, including agriculture, industry, new technologies and mining. In particular, Belarusbank allocates a large number of loans for the development and modernization of the energy system in order to set up new production facilities. Loans will be soon allocated on the project to launch continuous production of sodium chlorate and hydrogen peroxide at Mogilevkhimvolokno. These chemicals are imported into the country in large quantities for use in the production cycles of a number of Belarusian enterprises. We will produce them ourselves. I would also emphasize a very important project, which will also be financed by Belarusian banks in the near future. This is the high-precision foundry production of cylinder heads and blocks in Stolbtsy using the most modern technologies, which will help us obtain the necessary competencies,” the chairman of the National Bank said.
In his words, all loans are allocated on terms of payment and repayment. “In order for this to be so, the projects must be payable, have an acceptable payback period and the necessary marginality. Therefore, before making decisions on lending, there is a thorough procedure for economic evaluation of projects, validation and so on. This is a so-called multistage expertise. If budget funds or government guarantees are involved in the repayment of certain loans, the state comprehensive expertise is conducted. If the project is purely commercial without government support, but a state-owned enterprise is involved, then sectoral expertise is performed, followed by banking expertise, which is quite demanding to the business plans of projects and stress-tests them. So, in addition to stimulating the lending process, we are also very attentive to the fact that the projects are effective and ensure payback,” Roman Golovchenko said.
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