The demand for business loans in Cyprus is decreasing due to high interest rates, with bankers, however, estimating that the anticipated interest rate cut from the summer onwards is expected to provide some encouragement to the market.

Xenios Konomis, Director of Corporate & SME Banking at the Bank of Cyprus, told local news outlet StockWatch that there is an expectation of stable demand for business loans throughout 2024, despite interest rates remaining at high levels.

“The criteria for granting business loans have remained unchanged in recent times,” Konomis said.

“The anticipated decrease in interest rates, starting from June, according to estimates, is expected to help stimulate loan demand, although the geopolitical developments in our wider region are not overlooked,” he added.

Therefore, he indicated that “we will continue to experience a volatile environment that is expected to affect loan demand within 2024, with the situation constantly being evaluated, aiming for a quick response and action where necessary”.

Meanwhile, in the same article, Andreas Papadopoulos, Head of Commercial Banking at Hellenic Bank, noted that there has been a general decrease in demand for business loans, with the main factors being geopolitical instability, high borrowing rates, and uncertainty about the direction of inflation and the cost of raw materials.

However, he added, a decrease in interest rates will provide some vote of confidence for the positive trajectory of the European economy.