Reduction in soft loans will improve access of successful businesses to loans

According to the Belarusian Economy Ministry, in 2017, administrative lending to the economy will be halved as compared with 2016. The estimated amount of administrative loans in 2016 should not exceed BYN 2.8 billion. Simultaneously, enterprises should repay previously issued loans, which exceed this amount. The state is reducing administrative loans in accordance with the commitments to the EEU Anti-Crisis Fund. In 2017, administrative lending should not exceed BYN 1.3 billion. The state is likely to reduce support for key economic sectors. That said, half of agricultural enterprises could become unprofitable; cases of bankruptcy and restructuring of public enterprises could double as compared with 2016. In addition, the state will require additional funds to repay social obligations under labour contracts with employees at distressed companies. Access by successful businesses to credit resources is likely to improve due to the anticipated overall decline in interest rates, albeit social tension may increase due to a new wave of layoffs at troubled enterprises.