ArmInfo. The current situation with coronavirus affected the income of individuals and legal entities, which, of course, could not but affect the lending process. In response to a question from ArmInfo, this during an online press conference on May 26, said Executive Director of the Union of Banks of Armenia (UBA) Seyran Sargsyan.
"Naturally, banks are now unable to lend in the same volumes that were before the situation with the coronavirus. The financing process will continue, but the deterioration in the solvency of customers will affect the volume of lending," he explained.
At the same time, Sargsyan drew attention to the fact that after the credit holidays that the banks provided to individuals and legal entities during the State of Emergency, some customers will encounter difficulties in repaying loan obligations. "Naturally, this will not have the best effect on the volume of non-performing loans. I note that before coronavirus, the share of non-performing loans in the loan portfolio of the banking system of Armenia was 4-5% (excluding bad loans - Ed.), And historically has always been lower than in other countries "Even if this indicator increases significantly, it will still be within acceptable limits and quite manageable in comparison with other countries. And this is one of the main impacts that we will face in the post-coronavirus period," S. Sargsyan emphasized.
Note, in anticipation of the introduction of state of emergency in Armenia from March 16, the Armenian since March 13, banks announced a 2-3 month loan vacation for individuals and legal entities implying a deferred payment on interest payments and the principal amount of the loan. Moreover, the delayed payments will be transferred to the following months. According to experts, this increases the monthly repayment burden, which makes it difficult for a borrower who is in a difficult situation due to the coronavirus pandemic and restrictive measures taken in connection with this, to make it difficult to fulfill loan obligations.