22,500 applications for borrowers’ moratorium at banks in first two months
Banka Slovenije can report that during the first two months of the new law being in force, banks received 22,500 applications from borrowers for a moratorium on repayments, equivalent to 3.4% of total loans. The vast majority of applications were received by banks during the first month of the new law being in force. Our assessment is that future developments in the number of applications will depend primarily on progress in reigniting the economy in a situation where numerous economic indicators have plummeted in both the international and domestic environments.
The end of March saw the entry into force of the Emergency Deferral of Borrowers’ Liabilities Act (the ZIUOPOK). The law provides for a moratorium on credit liabilities for firms, sole traders, cooperatives, farmers, and other individuals. Previously an option that could be agreed between bank and borrower, loan restructuring has been made mandatory by the law. The option is temporary, and applies to all those who find themselves in difficulties caused by the outbreak of the crisis.
Banka Slovenije is monitoring the implementation of the law. The figures available after the second month of the law being in force reveal that banks and savings banks received 22,458 applications for a moratorium on repayments. The vast majority of applications were received by banks during the new law’s first month in force. The main development during the second month was a rise (of 114) in the number of applications by large enterprises, who also contributed most (EUR 118 million) to the increase in the total amount of liabilities deferred.
Figure 1: Number of applications received and total amount of liabilities deferred
|Segment||Number of applications for moratorium on repayments||Total amount of deferred, EUR thousand|
|Micro enterprises and sole traders||3,867||77,035|
Source: Banka Slovenije
Note: Reporting errors by certain banks meant that the figures for applications by households in the first month of the law being in force were overstated.
We can also report that the 22,458 applications for a moratorium on repayments cover an amount equivalent to 3.4% of the total loans that borrowers hold with banks. Moratorium applications were submitted for 2.7% of total household loans, and for 6% of total corporate loans.
Banka Slovenije can also clarify that the EUR 385.5 million of deferred repayments, which is the total amount of deferred liabilities according to the latest figures, is in essence cashflow that the banks will not receive during the moratorium period; it will be received later, after the end of the moratorium.
We should add that the aforementioned law allows households and businesses until the end of this year to claim a moratorium. Based on the applications received to date, it is therefore impossible to predict the final amount of loans that will be subject to the law. Our expectation is that future developments in the number of applications will depend primarily on progress in reigniting the economy in a situation where numerous economic indicators have plummeted in both the international and domestic environments.