The 4.5 million Romanians who took loans from banks pay aboutfive billion euros a year in form of instalments, reveal ZF'scalculations, that is as much as they spend on cigarettes, beer andsoft drinks - the biggest markets in the consumer industry.
The average indebtedness of those who took out loans stood at 28%at the end of 2008, according to the latest NBR data. With theRomanians' salary incomes standing at almost 19 billion euros (peryear), the volume of instalments on loans revolves around 5 billioneuros. This means that every person who has a loan to repay spendsan annual average of 1,100 euros on instalments.
The repayment effort increased after the interest rate hike at thebeginning of the financial crisis in the autumn of 2008, and NBRdata reveal bankers are in no hurry to adjust costs for loans inprogress. Given that interests on the loans sold in the previousyears are not tied to a transparent indicator (as the regulationsin force stipulate), and banks can arbitrarily set the interestlevel, the loan instalment repayment effort remains high, whilemany people are seeing their incomes dwindle and the price of otherassets going down, such as the decline in the price of homes andland, which is the most visible of all.
This is the burden of the almost five years of lending boom(2004-2008), when loans taken by individuals increased ten times,to 25 billion euros.
