28 years after independence, we find that the financial market of the Republic of Moldova is underdeveloped. The only remaining tool is banks and, more recently, microfinance companies, which are growing rapidly. It is the observation made by the economist IDIS Viitorul, Veaceslav Ioniţă during the "15 minutes of economic realism" show.
We are witnessing an unprecedented increase in non-bank lending against the backdrop of the banking crisis that the Republic of Moldova has experienced since 2014. The non-banking sector is registering a 25% increase by doubling its lending to the economy, as well as the share of loans granted - to 16% and most likely to exceed 20-25% in a few years. Lending to the economy was halted, and lending to the banking and non-banking sector was on the back of individuals. This leads us to the idea that the Republic of Moldova must rethink the whole financial system. Banks and the non-banking sector are too few, as funding applications are not covered and we are actually witnessing a blockage on the background of population growth.
"Banks are currently financing SS, virtually the only documents circulating in the Republic of Moldova, so authorities need to create prerequisites for the development of other financial instruments such as the issuance of bonds by companies and local public authorities. This will provide the opportunity for economic agents and the population to finance businesses and authorities by avoiding the banking and non-banking system ", Ionita said.
In his opinion, another instrument to be developed is the securities of the private entities and this year for the first time the Purcari wine company made a share issue at the Bucharest Stock Exchange. It is a turning point, as private companies become open, transparent with access to the capital market. It is a new tool that allows the development of bonds. And the Republic of Moldova must see how it can integrate the Chisinau scholarship into a regional scholarship with that of Bucharest or Budapest.
In conclusion, Veaceslav Ionita mentioned that the authorities should also draw attention to the liberalization of cross-border financial services. However, the lack of freedom of flow places the Republic of Moldova in a blockade.
The show is made by IDIS "Viitorul" in partnership with Radio Free Europe.
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