02.11.2022
The Borrower Protection Association (Syprodat) met with the Cyprus Chamber of Commerce and Industry (Keve) this week to discuss a range of issues including suspension of foreclosure, viable loan restructuring, rising interest rates, and the need to protect vulnerable populations from a surge in spending .
In statements made after the meeting between the two organisations, Keve General Secretary Marios Tsiakkis said “the chamber’s position remains the same and that NPLs should be finally resolved and removed from our banking system.”
He added that the House opposes a permanent suspension of buyouts. “Everyone should understand that anyone who has taken a loan or will take a loan is now obliged to return it,” Tsiakkis said.
Secretary General Keve also mentioned that the Chamber may understand that some borrowers are having difficulty repaying their loans, especially in cases where they have mortgaged their main residence or office space as collateral.
“As long as these loans are within the relevant regulations, we will be open to discussing possible proposals to help people who are really having a hard time repaying their loans and see if they can be helped in some way,” Tsiakkis said. said.
“Perhaps primarily due to soaring inflation, some people are really struggling to repay their loans, however, under no circumstances will the chamber pass any agreements that facilitate or provide coverage for defaulters or defaulters of strategic loans,” he added.
Moreover, according to Tsakkis, the chamber has asked the association for the protection of borrowers to submit their proposals on this issue, which will then be considered by the Keve executive committee.
“In the event that one of these proposed countermeasures does not conflict with the House’s broader policy, we will review it and see if we can support some of these proposals to help people who really need it. Of course, if it does not endanger the Cypriot banking system,” said Tsiakkis.
For her part, Tseni Papacharalambous, director of the borrowers’ association, described the meeting as constructive, saying the two organizations found common ground on the need not to protect strategic defaulters.
She also mentioned that the Chamber had invited Syprodat to present its own ideas on what measures could be taken to protect borrowers.
“The purpose of the meeting was to take into account not only our votes and parliamentary parties, but also to unite with all local governments in order to put pressure on the state to take compensatory measures,” Papacharalambous said, listing the range of issues that are currently worrying both borrowers and consumers. “Compensatory measures can take the form of tax breaks or interest rate subsidies,” she added.
In addition, she explained that the measure implemented by the state asset management Kedpies, which provides for an increase in interest rates not today, but at the end of the loan agreement, turned out to be very useful.
“An extended suspension of enforcement may not be the best solution, but in the current circumstances it is necessary. Because until the rent-to-hire scheme is implemented, among the population, those with this primary residence are not protected,” Papacharalambous said.
The director of “Syprodat” stated that it is not true that the first houses are not put up for auction, and added that “the acquiring companies, as well as banks, continue to put up for sale the first houses.” “In some cases, these auctions are suspended only after the intervention of the Financial Commissioner or the Borrowers’ Association,” she added.
In conclusion, Papacharalambous said that borrowers today are suffering due to rising interest rates, which will lead to an increase in non-performing loans.
