"Credit holidays" with the postponement of all payments make sense only for short periods and in cases of extreme events, such as the military aggression against Ukraine.
This was stated by Olena Yermolova, Risk Management Director and Board Member of GLOBUS BANK.
In other cases, the expert emphasized, the application of such an approach leads to "chronic ailments," as neither the bank nor the borrower solves the problem by "shifting" the payment of mandatory payments, but only complicates it.
"The debt will grow, and at some point, the situation may reach a deadlock, and it will no longer be possible to resolve it with minimal losses, for example, by simply selling the property purchased with the loan," the banker stressed.
According to her, banks are almost always ready to negotiate the restructuring of problematic loans because they are interested in a quality loan portfolio. However, restructuring, and even more so "credit holidays," are not a panacea in all cases. According to Yermolova, currently, a borrower can be offered restructuring if they at least partially service the loan and have the ability to pay interest that will accrue after the restructuring within the next few months.
In this case, the main tools for restructuring can be:
"Granting and obtaining a loan during wartime is a very responsible operation for both the borrower and the lender. On one hand, a loan, for example, opens up new opportunities for business development, purchasing necessary goods, repairing a home, etc., but on the other hand, a loan can become a burden that ruins a citizen's life. Therefore, it is crucial for potential borrowers to make decisions about the necessity of taking a loan only after a detailed and complete analysis of their own financial situation and future prospects. But most importantly, the bank is always ready to approach the problem with understanding and offer an optimal solution that satisfies both the borrower and the lender," summarized Olena Yermolova.
