Consumer lending continues to stagnate, with new loans unable tokeep up with those that have reached maturity because the highinterest rates discourage prospective clients, while banks do notgrant non-secured loans as easily as before, amid uncertaintiesrelated to the economy's progression. At the end of August, theoverall volume of consumer loans amounted to 73.9 billion RON (17.5billion euros), a similar level to that recorded in the previousmonth, but down 3% against the volume posted at the beginning ofthe year. Mortgage loans, on the other hand, rose for the fourthconsecutive month, by around 4% against this year's April minimum.Bankers explain the poor performance of consumer loans by the factthat only a small share of these products are secured, which makesthem the biggest loss-makers for banks. Clients are there, butbanks are more tight-fisted when it comes to the amounts they lend."The volumes sold at present are not offset by repayments. It isnormal to see this progression on the lending market in a time ofeconomic decline. At our bank, for instance, the sums approved arelower than in previous years," said Gabriela Nistor, retail creditmanager at Banca Transilvania. Against August 2008, the volume ofconsumer loans granted by banks in Romania is almost eight per centhigher, the lowest annual rise recorded since 2005. Until early2007, consumer loans recorded annual increases of up to 100%, withthe banks' portfolios largely set up after 2004.
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