140,000 Moldovans cannot repay loans: debt collectors will collect debts
In 2022, Moldovan citizens took loans from banks or microfinance lending companies, but many of them, for various reasons, failed to repay the borrowed money on time. Thus, last year, the debts of more than 140 thousand borrowers were transferred for collection to Moldova’s largest collection agency. The largest debt accumulated by an individual is 2 million lei, and by a legal entity – 1.5 million lei, TVRmoldova reported on 16.01.2023.
Of the more than 140,500 Moldovan citizens with debts to banks or microcredit companies, 58% took out consumer loans, 25% for utilities and 17% for other needs.
“The year 2022 was a difficult year with problems, including the conflict situation in a neighbouring country. There are more and more excuses for borrowers. I mean, many people may have lost some sources of income because their business was linked to a neighbouring country,” says Adelina Popa, finance director of a debt recovery company.
Experts say recent price increases and low wages are among the most common reasons cited by debtors.
“The reason they don’t pay their debts is always that people supposedly don’t have money, salaries are low, priorities are different, because of low salaries people don’t have access to finance, costs are high, expenses are increasing, people don’t want to work on low salaries, they can’t find a job, there are many other reasons, they are sick, money goes on medicines, so there are always excuses and they are quite plausible, but we have to find a solution,” says Adelina Popa.
Some people interviewed by the TV crew still say they prefer to save money rather than take loans from banks.
“No, I don’t take loans because it’s spending money you don’t have. If you can’t earn that money, you have to rely on what you have at the moment. Yes, and interest rates on loans have gone up now, even in banks, something like 16% on a simple loan, so it doesn’t make sense,” said one passer-by.
“I didn’t take loans and I didn’t have such a need,” another man told reporters.
Viorel Gîrbu, an economics expert, said the microfinance sector was among the hardest hit sectors of the financial sector in 2022.
“The situation is worse here, so we are seeing an increase in the share of loans in arrears. The recipients of these loans are in arrears on their instalments. Personal lending has been quite anemic. In 2022, there were problems with consumer loans. Personal loans declined by 3% and we had an increase in NPLs,” said the economic expert.
Economists believe that inflation and low wages do not allow people to cover their consumption volume. Therefore, some people have to make up the shortfall through savings, loans or other informal sources.
