Experts Advise: Obligations Toward Banks Should be Regulated on Time, Moratorium Should be Used by Only Those Who Must

Economic analyst Ana Nives Radovic has suggested to everyone not left without earnings in the current situation caused by coronavirus to regulate their obligations on time so that the period of planning the spending more freely would follow the repayment of the credits.

– The moratorium measure should only be used by those left without their expected earnings in the new circumstances – Radovic told the Mina-business agency.

Radovic said that the option of having the repayment of credits for a period of 90 days might sound attractive, but that it can also create additional problems in setting up the home budget, as the economic effects of this situation are only just becoming apparent.

She warned that the damage done to the global and the local economy would become more visible only after several months.

– The possibility of postponement no doubt suits everyone whose personal income has dried up completely, such as transporters, hospitality managers, craftsmen, artists, students and workers for hire, that is, those without a fixed monthly income – Radovic believes.

On the other hand, she said, there are many whose monthly earnings have remained unchanged and who don't stand to gain anything by postponing the repayment, but are actually taking on an additional risk of facing the same expenditures at a time when their earnings are likely to be lowered.

Radovic also said that the situation needed to be seen through the potential decisions that employers could make, but also through the usual patterns of behavior in consumers' psychology.

– In the first case, each employer who takes some damage will no doubt implement savings measures, which usually entail a reduction of salaries, especially in small businesses – Radovic added.

In such situations, the user of the credit, who is now being paid a full salary, will use the money for other costs, which will expose them to the risk of having the loan installments become due at the time where their personal funds are lower.

Radovic said that, on the other hand, self-isolation and cessation of all social activities have a special impact on the way consumers make decision, which can often be irrational or entail spending on things not necessary in the phase preceding the time of the implementation of savings measures.

Ana Nives Radović

moratorium on credits

credits

repayment of credits

coronavirus

small and medium enterprises

impact of coronavirus on the economy