THE IMPORTANCE OF THE RETAIL CREDIT PORTFOLIO FOR ECONOMIC GROWTH OF MACEDONIA
Journal Title: EMC Review: Časopis za ekonomiju i tržišne komunikacije - Year 2016, Vol 6, Issue 1
Abstract
The aim of this paper is to evaluate the infl uence of trends in retail loan portfolio onthe consumption and economic growth of Macedonia. The consumption of population is one ofthe components of GDP, and one of its drivers is the retail credit activity. On macroeconomiclevel, there is wide consensus among researchers that credit activity and quality of portfolio isdriven by GDP movements, unemployment ratio and indebtedness of population. Also, viceverse the activities in retail segment influence on consumption and indirectly on GDP. So thesetwo linkages enhance between and can result in negative spiral. Negative movements in GDPinfl uence on the quality of portfolio and higher NPL ratio. And higher NPL ratio results infurther decrease in credit activity and has additional negative impact on GDP. Because of thatis important to determine the causes of credit activity in this segment. The retail portfolio in thelast 4 years in Macedonian banking sector is growing continuously, opposite of other Balkancountries. That is why is important to analyze the past growth of retail portfolio and to determinepossible weaknesses because of its future impact on GDP. One of the most important driversthat determine the future credit growth is the quality of retail credit portfolio in the moment. Another important aspect for the portfolio trend will be the interest rate environment. There isclear empirical evidence that low interest environment triggers greater credit activity and viceversa. Another important aspect of the credit qrowth, is the maturity of the retail credit portfolioas a way to decrease the monthly installments and to accumulate greater risk on longer term.Special focus of this paper will be the trend in retail loan portfolio after 2008, when the bankingsystem of Macedonia felt the impact from fi nancial crisis. The activities that were taken bythe banking sector then can be some guidelines for future crisis. The retail credit growth will beanalyzed by products in order better to understand bank strategies and reasons that contributedfor such a growth. Also, the analyze of NPL ratio by product will give answer whether the qualityof portfolio by products was one of the key drivers for credit activity.
Authors and Affiliations
Evica Delova Jolevska, Andovski Ilija
Keywords
Related Articles
- EP ID EP247375
- DOI 10.7251/EMC16018J
- Views 117
- Downloads 0
MODELLING OF INNER CORRELATION FACTORS AS A PLATFORM FOR QUALITY MANAGEMENT IN THE HOTEL INDUSTRY IN B&H (RS)
Through sets of measures and decisions, the business systems direct their own activities on the path of realization of business goals, defined as the desired values of the output vector coordinates. The business efficien...
PRODUCT DESIGN IN THE SERVICE OF QUALITY INTERNATIONAL MARKETING
The world is full of favorable opportunities, they could be big, small, recurrent, unrepeatable, and in the end they are always either used or missed forever. The product design is a convenient opportunity used to implem...
THE FUTURE DEVELOPMENT OF THE SERVICE SECTOR AND IT’S IMPACT ON THE BANKING INDUSTRY. THE CASE OF MACEDONIA
The aim of this paper is to elaborate the importance of service sector and how its future development will affect the banking industry in the Republic of Macedonia. We live in a service society, where services sector r...
APPLICATION OF THE PUBLIC PROCUREMENT SYSTEM IN BOSNIA AND HERZEGOVINA WITH REGARD TO THE IMPROVEMENT AND DEVELOPMENT OF EDUCATION AND TRAINING
The public procurement system isnowadays a special discipline, and this paper explores the possibility of researching it. The main reason for researching the mentioned system is the need to apply the public procurement s...
MANAGING THE DEVELOPMENT OF SOCIAL ENTREPRENEURSHIP
Th e rapid growth of social entrepreneurship is characterized by an increase in social inequalities alone poverty in the world, which is a consequence of the development of globalization. About social entrepreneurship an...