The Cyprus Borrowers Association (Syprodat) reported this week that it has observed a significant increase in activity among nearly all banks focusing on up-to-date borrowers.

As a reaction, the association issued a statement emphasising that while banks are addressing this particular segment of the market, they must not neglect non-performing loans or borrowers striving to save their properties.

It also urged these borrowers to seek collaboration with their respective banks to achieve “sustainable and long-term restructuring”.

“The competition being created contributes to the improvement of services and enhances transparency, better serving the needs of borrowers,” the statement said.

“In particular, banks are offering reward programmes for up-to-date borrowers, recognising the importance of timely loan repayment and providing increasing incentives to encourage such behaviour,” Syprodat added.

“Some banks,” the association continued, offer cash rewards or points, like the Bank of Cyprus, while Hellenic Bank and the National Bank of Greece (Cyprus) are reducing interest rates,” it added.

The association also mentioned that by adopting these strategies, banks are “promoting responsibility and timely loan repayment”, while at the same time “offering real benefits” such as reduced interest rates and other financial rewards.

It further explained that from interest rate reductions and cash bonuses to more favourable terms for future loans or other banking services, “reward programmes are emerging as a strategic way for banks to improve borrowers’ credit behaviour” and highlight the value of responsibility.

“Reducing interest rates encourages consumption and investment, as it makes financing more affordable,” the association said.

“Borrowers, taking advantage of lower rates, can borrow more money for property purchases, cars, and so on,” it added.

Syprodat further stated that “this can boost economic growth and help reduce debts, making them more manageable”.

At the same time, the association also stressed that “banks should not forget non-performing loans or borrowers who are making efforts to protect their assets”.

“The governor of the Central Bank of Cyprus (CBC) has called on banks to implement social policies, which implies that sustainable restructurings should take place and all efforts should be exhausted to avoid foreclosures, particularly of primary residences and professional premises,” Syprodat said.

“Once again, we urge borrowers not to remain passive but to seek cooperation with their bank in order to achieve sustainable and long-term restructuring,” it added.

“The association is available to assist borrowers in any way they need,” the statement concluded.