Some of them indicated that additional creditworthy borrowers could not be found for short-term loans, while others also emphasised that it is harder to find more creditworthy enterprises than identify more creditworthy households. In other words, in Croatia, there are many people who need money, but not so many people who actually have the creditworthiness to get a loan. We asked banks what were the main factors affecting the interest rates they charge on loans. The other major factor was the character of the client. Banks tend to differentiate interest rates according to a range of considerations including clients' creditworthiness, the amount of business clients conduct at the bank and whether clients are involved in many foreign transactions.
Banks are also willing to bargain with their clients to a certain extent.
11 banks said that they frequently bargain with banks over interest rates, while 29 banks say that they bargain occasionally, mainly to attract or retain the interest of most-favoured clients. 13 banks said that they do not bargain at all. Where to go from here Croatian banks have come a long way. Competition is growing, and the range of services is starting to improve. But there is a lot more to do.