The Loan Market in Lithuania: Evaluation of Developments in 2002-2012 Years

Abstract

Historically and for a long, banks activity is more connected with providing loans than with borrowings for their own purposes (T. Mayer, J.S. Duesenberry, R.Z. Aliber, 1990).The object of the article is Lithuanian loans market. The task of the article is to present analysis and evaluation of loan market developments during 2002-2012 years.Commercial banking activity in Lithuania has its old tradition. State bank „Bank Polski i Litewski“ was found in 1792. This bank had it’s affiliates in Vilnius, Gardinas and Minsk (now – Belorus). In 1795 when Lithuania and Poland third time was divided, and Lithuania lost statehood and independent, as well as a possibility to create and develop own finance and credit system (O. Bucki?nien?, 2011).Lithuanian loans‘ market is analyzed using related scientific-theoretical literature about peculiarities of loans market, also statistical data and official facts from the reports of Bank of Lithuania and State Statistical Department in ten years‘ (2002-2012). The main factors influenced on loan market developments are GDP per capita, inflation, unemployment, middle average salary, interest rate and volume of deposits in a certain periods etc. Various indicators of loans market development are calculated and presented in article - dynamics according to various factors (dynamics of loans and GDP, dynamics of interests, duration, currency, purpose of loans, mortgage loans proportion), as well as sudden changes in indicators, quality and risk of loans portfolio is evaluated, reasons of market boom and factors influencing on its development are clarified, as well as problems and tendencies are evaluated. There have been employed following methods: Lithuanian and foreign theoretical scientific literature analysis; filling of, sorting out and calculation of statistical data and evaluation of statistical facts; statistical facts comparative and retrospective analysis. After making analysis of loans market, there have been made following conclusions: in 2002 – 2005 loans market was growing because of economical fast growing and overestimated optimism for future welfare, there was loans‘ boom in the state during 2002 – 2008 years, although because of financial crisis from 2009, loans‘ market recession happened; 2011-2012 is a period of loans‘ market stability; from 2014, a growth of loans‘ market is forecasted, however it is very important, that it would be temperate after all.

DOI: 10.5901/ajis.2013.v2n8p171