Falling demand, rising security

What characterised the last 12 months? Slow expansion in corporate lending and stagnation in the activity of commercial banks. In the first year of the crisis banks started a more strict lending policy but demand for loans also declined, especially in the SME sector. Lending practices also changed: the focus shifted to production sectors and in assessing the eligibility of companies’ sector-specific factors became more important. Ferenc Balogh, MKB Bank’s senior consultant told our magazine that they introduced standard products for SMEs, the objective of which was to meet a kind of mass demand for loans. The market received these products really well. MKB bank opted for individual loan management in the case of bigger companies in a more complex lending situation – this means that customised solutions were used instead of ready-made products. As a result of the bankruptcy wave, MKB Bank now identifies several new parameters when analysing customer characteristics. The bank’s opinion is that more state guarantee programmes are needed, especially sector-specific solutions. Another great step forward would be adopting legislation that would reduce the number of cash transactions, which are not only expensive but also prevent banks from having a transparent picture of a given enterprise. Raiffeisen Bank has similar experiences, György Dercsényi sector director of Raiffeisen Bank informs us. In the SME segment the crisis lingers on but positive signs can also be detected and lending activity is improving. When performing risk assessment, Raiffeisen Bank concentrates on financial data and stability, the market situation, customers and trends in ordering, payback capability and the dedication of owners. Companies that have been up and running and operating transparently for years can expect a more positive assessment. This year Raiffeisen Bank appeared on the market with a product line tailored to SMEs needs. Their policy is that the sum of a current account loan only depends on the sales revenue of the eligible enterprise. It depends on the enterprise and not on the assessment report of the bank how big the sum available for financing the company’s liquidity is. This way a loan is transparent and easy to plan.