The private sector should bear the cost of resolving Serbia’s problem of non-performing loans, the Balkan country’s central bank said on Wednesday after a two-day conference with officials from the IMF, World Bank and EBRD.
Bad loans account for 23 percent of total lending in Serbia, where foreign banks account for 75 percent of the market.
Under a 1.2 billion euro loan deal with the International Monetary Fund approved in February, Serbia agreed to draw up a strategy to resolve the problem in order to maintain financial stability.
So far, four banks have gone bankrupt under the weight of bad loans, at a cost of 800 million euros to the state.
“It was concluded that NPL resolution must be financed by the private sector, whereas the public sector must provide support through regulatory incentives,” the central bank said in the statement.
“Developing the NPL market is one of the priorities, with foreign investors already showing interest,” it said.
Source; Reuters
