The Executive Board of the National Bank of Serbia adopted a decision on temporary measures for banks to facilitate citizens’ access to finance, all in order to prevent the negative effects of the Covid-19 pandemic.
– The decision prescribes three sets of measures of a temporary nature that should enable easier access of the population to housing loans – the NBS announced and added that this also provides support to the construction industry.
The first measure refers to the approval of new housing loans from new construction to the population.
– The subject of lending, in addition to fully completed apartments, can be facilities under construction, regardless of the degree of completion, if it is a project financing of the bank, where the Construction Directorate of Serbia is the holder of a building permit or within state support measures to certain categories of individuals – states the NBS.
New construction
Facilitated access to loans also applies to facilities under construction, with a minimum degree of completion of 60 percent if it is a project financing of another bank or a project of a legal entity investor.
– Instead of the minimum degree of construction of 80 percent, incentives were given to banks for approving housing loans without waiting for the completion of the housing facility in full or to the greatest extent – states the NBS.
In order to provide funds for these purposes, it is envisaged that the parties will use part of the funds in the form of capital, ie certain protective layers of capital that they otherwise allocate, to finance this form of lending.
– This decision additionally supports the previous programs related to the purchase of the first apartment, so that for newly approved loans from this category, preferential treatment is enabled – states the NBS.
The second measure is to facilitate the repayment of housing loans to citizens, especially those who will potentially face reduced or uncertain incomes in the coming period, as well as those who want to settle their obligations in the longer term than originally planned.
– During this and next year, banks are allowed to offer relief to debtors who borrowed before the decision comes into force by extending the loan repayment period for a maximum of five years, without changing or deteriorating the status of debtors in repaying those loans – said NBS.
The third measure is the possibility for a natural person who does not receive a salary, ie a pension, to get a loan of up to 750 euros with a maturity of up to two years through an account in that bank, if as a relevant proof of employment and salary or pension in the last three months criminal and material liability. Banks will be able to implement the set of measures by the end of 2021.
Prof. Dr. Zoran Grubisic from the Belgrade Banking Academy says that from the point of view of economic growth, the first set of measures is the most important, which implies significant facilitations for taking housing loans for newly built apartments.
– The first set of measures encourages the construction industry, and that is extremely important, because its participation in the total economic activity is significant. These measures refer to newly built residential buildings and make it easier for them to take out housing loans for new construction. The previous condition was that the degree of completion of the facility must be 80 percent in order to apply to the bank and get a housing loan, and now this is further facilitated by the fact that, if the project financing is in question, it can at any stage, even at at the beginning – says Grubisic.
He adds that the second and third sets of measures are aimed at making it easier for citizens who have problems repaying loans due to the crisis.
– They enable banks to extend the repayment period up to five years, which reduces the installment and facilitates that indebtedness for those who need it. This certainly means a higher interest rate, because when the repayment period is longer, a higher interest rate is paid in total. However, when someone cannot regularly repay the loan with this war, it certainly means something to him – says Grubisic, while, in his opinion, the third set of measures is symbolic because citizens already have similar opportunities, Srbija Danas reports.
