Loans in the EAEU: where is it cheapest and most expensive for businesses to borrow in foreign currency?

The EAEU's financial map for the second quarter paints a contrasting picture. While some countries are trying to maintain the availability of foreign currency loans for businesses, others are forced to live with double-digit interest rates.

Belarus has become the absolute record holder in terms of the cost of foreign currency borrowing. Here, short-term loans cost companies an average of 14.7%, and long-term loans cost 12%. For businesses, this means that every loan becomes a serious financial challenge.

The picture is completely different in Kazakhstan. There, foreign currency loans remain the most affordable in the EAEU. Short-term loans are provided at 7.7%, long-term loans at 7.4%. In fact, this is almost half the price of Minsk. Such interest rates open up more opportunities for business expansion and make Kazakhstan an attractive investment destination in the region.

The other countries are located between these two extremes:

• in Russia, loans cost 9.7-9.8%;
• in Kyrgyzstan, 10.4% for short-term loans and 8.3% for long-term loans;
• in Armenia, between 7.7% and 8.2%.

The difference of more than 7 percentage points between Minsk and Astana is an indicator of how different the credit reality is in the union.