by
January 23 – January 29, 2017

Consumer lending is unlikely to improve until incomes start growing

The situation has not changed

According to the National Bank, as of January 1st, 2017, consumer debt of Belarusians totalled BYN 1.7 billion and increased by BYN 59 million over the year. Provided the average interest rate on consumer loans in 2016 at 24.4% per annum, interest payments on loans could exceed BYN 400 million. People preferred to repay old loans rather than taking new ones. Financial health of banks mainly working with consumer lending is likely to deteriorate, layoffs in the banking system are likely to persist, and interest rates on loans are likely to decrease, while banks will preserve tough requirements for borrowers to prevent growth in bad loans. Unless people’s wages start growing, they are likely to constrain consumer spending, and in order to boost sales, enterprises are likely to use instalment schemes and calculate some costs as own costs.

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Once a week, in coordination with a group of prominent Belarusian analysts, we provide analytical commentaries on the most topical and relevant issues, including the behind-the-scenes processes occurring in Belarus. These commentaries are available in Belarusian, Russian, and English.
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