The Central Bank of Cyprus (CBC) survey said: “Banks have adopted stricter criteria in offering loans, mainly due to the uncertainty and potential increased risk they face amid the pandemic and on the other hand, the demand for business loans has increased, mainly due to of the lack of liquidity they faced “.

Implementation of support measures for businesses in the form of state guarantees was expected to lead to a relaxation of lending criteria, and therefore to increased demand, as in other countries where targeted measures were introduced.

However, from July to September 2020, the criteria for lending to businesses in Cyprus were affected by the pandemic and became stricter than in the previous quarter.

This applied to criteria for lending to households for both mortgages, consumer and other loans.

Moreover, in Q3 2020, the net demand for loans in Cyprus by companies increased, according to the banks’ responses to the survey.

Demand for loans from households also increased compared to the previous quarter, both for mortgages, consumer and other loans.

The criteria for lending in Q4 2020 to both businesses and households for all types of loans were expected to become stricter.

According to the expectations of the banks, net demand for loans from both businesses and households for all categories of loans is expected to increase especially after another lockdown.

Source: Financial Mirror