In Bosnia, the increasing reliance on consumer loans has become a pressing issue as citizens grapple with soaring living costs. Recent data from the Central Bank of Bosnia and Herzegovina reveals a significant rise in consumer credit, highlighting the financial struggles faced by many households.
Key Takeaways
- Consumer loans in Bosnia increased by 78.7 million BAM in August.
- Many citizens, including those with average incomes, are resorting to loans for survival.
- High interest rates and strict bank requirements are pushing borrowers towards unsecured loans.
Economic Context
The economic landscape in Bosnia has been challenging, with rising living costs affecting the purchasing power of citizens. The Central Bank’s report indicates that total loans reached 25 billion BAM in August, marking a 34.9 million BAM increase from July. Notably, the consumer sector saw a substantial credit growth, contrasting with declines in other sectors.
Personal Stories
Cica Bosnic, a resident of Banja Luka, exemplifies the plight of many Bosnians. With a pension of only 428 BAM after 30 years of service, she was compelled to take out a 5,000 BAM consumer loan. "This will be the last time," she states, expressing frustration over high interest rates that leave her with little after expenses.
Seasonal Trends
Autumn is traditionally a peak season for consumer loans in Bosnia. Families prepare for school expenses, winter supplies, and heating fuel, leading many to seek financial assistance. According to Admir Arnautovic, president of the Consumer Association of Central Bosnia, even those with average incomes are increasingly turning to loans to manage their budgets.
The Shift Towards Unsecured Loans
The trend towards unsecured loans is notable, as many consumers prefer them to avoid the stringent collateral requirements imposed by banks. Marko Djogo, dean of the Faculty of Economics at the University of East Sarajevo, notes that this shift reflects a broader change in borrowing behavior, with individuals and small businesses opting for quicker, albeit riskier, loan options.
Conclusion
The growing dependence on consumer loans in Bosnia underscores a critical economic issue. As citizens navigate rising costs and limited financial resources, the trend raises concerns about long-term financial stability and the potential for increased debt burdens. Without significant economic improvements, many Bosnians may find themselves trapped in a cycle of borrowing, struggling to make ends meet.
Sources
- Growing reliance on consumer loans in Bosnia as citizens struggle with rising living costs – N1, N1 Bosna i Hercegovina.
