More Turks unable to repay loans after rules re-tightened

Non-performing loans in Turkey jumped in January after the authorities reversed more flexible measures concerning debt repayment introduced during the COVID-19 pandemic.

Banks chased up around 222,000 more people for credit card and personal loan debt compared with 73,000 in January last year, the Dünya newspaper reported citing data published by the Banks Association of Turkey (TBB).

Turkey’s government and central bank have sought to boost borrowing by businesses and consumers by keeping interest rates at below inflation and by issuing cheap loans via state-run banks. Interest rates on personal loans average an annual 29.2 percent compared with inflation of 54.4 percent, according to central bank data.

The number of people in arrears on personal loan repayments totalled 3.02 million. Those in arrears on their credit cards totalled 2.66 million, Dünya said. There are around 61 million adults in Turkey from its 85 million population.

Outstanding loans issued by banks and non-bank financial institutions increased by an annual 41 percent to 5.22 trillion liras ($352 billion) in January, the newspaper said. Eighty percent of that amount was commercial debt.

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