Lending activity down by 2% in 2014

BELGRADE - The total credit debt of legal entities dropped by two percent compared to 2013, while the debt of citizens increased by around nine percent, the Association of Serbian Banks stated on Monday.

The debt per capita arising from loans and leasing services increased from EUR 834 in 2013 to EUR 861 in 2014.

Veroljub Dugalic, secretary general of the Association of Serbian Banks, said that the two percent drop in lending activity is bad news for the Serbian economy, because there is no growth without investments.

Legal entities, i.e. the Serbian economy, had a total debt arising from bank loans of EUR 11,483 billion, while the citizens incurred a debt of EUR 5,574 billion.

Legal entities fell behind on debt repayment by 20.7 percent on December 31, 2014, which is an increase of 5.3 percent compared to same day in 2013, Dugalic said, adding that disorder in loan repayment is increasing.

Similar with the debt of citizens, the default on bank loans increased by 6.8 percent at the end of 2014 from five percent at the en of 2013, except that the defaults stagnated at around 6.7 to 6.8 percent in the last quarter of 2014, he said.

The debt of citizens increased by around nine percent in 2014, said Dugalic, adding that the most dominant categories are housing loans and cash loans.

A drop of 5.6 percent was recorded only with consumer loans, while other types of citizens' loans were on an increase from seven to ten percent in 2014 compared to 2013, Dugalic said.