PRODUCTS AND SERVICES
In both Eastern European and Central Asian countries only limited development is observed in the supply of products and services due to matters of regulation and, in some cases, mistrust of the banking system. In general only cooperative institutions and commercial banks can offer savings products.
One noteworthy case is the existence of commercial paper (called factoring in Spanish) in the form of an initiative by Agroindbank in Moldova in response to the limitations of the financial system rather than as a result of its development. In a country with a highly underdeveloped financial system this form of financing is being offered to small farmers, who would normally not be the recipients of credits, on the basis of their sales to recognized firms, covered by documents acknowledging payment obligations.
Organisations operating in the sub-region of Central Asia, where the industry is in its infancy and levels of competence are low, may set very high interest rates, thus generating high profit levels, in spite of their lack of efficiency. Cases in point are an ROE of 142% in some organisations in Tajikistan, and an ROA of 36% in Uzbekistan.
In Eastern Europe the situation is different. For example in Bosnia-Herzegovina, which is the benchmark country, strong competition, particularly in urban areas, is having a positive influence on interest rates.
