Belarusian banking sector to reduce credit cost for successful enterprises to discount rate in early 2017
The average interest rate on rouble loans for legal persons in October 2016 was 21.8%, which is 12.4 percentage points lower compared with interest rates in December 2015. Low demand for credit resources amid higher budget expenditures has led to a sustainable excess liquidity. On November 16th, 2016, the National Bank allocated BYN 1 billion for a 28-day period at 12% per annum. Interest rates on currency and rouble loans are likely to continue to decline; household deposits in the banking system are likely to reduce and banks are likely to tighten rules for assessing credit risks when granting loans to enterprises. Banks are likely to restructure loans in order to fight bad debts. The state may tighten game rules for the banking sector, which means that successful businesses are likely to be able to receive credit resources at the discount rate in Q1 2017 due to lower bank profitability.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.