Businesses eager to pay back loans

Since the beginning of 2021, Greece’s four biggest banks – Alpha, Eurobank, National and Piraeus – have lent businesses some €70 billion, and businesses, in turn, have paid back €55 billion from these or earlier loan.

The net credit expansion of €15 billion is considered low and there are worries that it may drop further in coming years.

Businesses pay back their loans, often early for two reasons: because they expect interest rates, and thus the cost of servicing their debt, to increase and because, at a time of relatively high inflation, they have plenty of cash in hand. The latter is true of the shipping sector, whose activity has rebounded following the Covid-19 pandemic and energy companies.

The banks believe that credit expansion, at least for the next three years, will be helped by projects funded through the EU’s Recovery Fund.