“There are 14 banks and six micro-credit financial institutions operating in Montenegro. There are also indications that a new bank may start working in 2016. There are comments that this is a high number and that Montenegro does not need so many banks. The number is not important, but their offer and the price of their products,” he told radio Antena M.
The fact that there is interest in opening new banks is a sign that the working conditions in our country are favourable, Kalac said. It is believed that Montenegrin banks have the ability to increase their loan activity and reduce interests.
This is corroborated by the fact that in the last months of 2015, bank deposits were higher than approved loans.
However, interest rates are still high.
“They are much higher than in the EU, where interest rates are below 3%, and higher than some economies in the region. Until November 2015, the weighted average effective interest rate on total loans approved amounted to 8.65%, whereas it is somewhat lower on new loans – 7.36%. There was a slight decline in interest rates – it ranges between 0.5% and 1% on total loans and about 1.5% on new loans. However, the decline in interest rates in 2015 was assessed as insufficient,” Kalac said.
Banks are doing well. On the other hand, accounts of many companies are blocked, Kalac pointed out. Fortunately, there has been a downward trend in non-performing loans. Companies must also repay their loans.
A step forward in solving these problems is so-called “Podgorica model”, ie the Law on Consensual Financial Restructuring between banks and companies.
“However, it is worrying that although the application of the law began in early 2015, it practically has not been implemented yet,” concluded Kalac.
