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Turks face financial woes as reports finds more citizens can’t afford to service credit

Almost five millions of Turkish citizens fall under the government’s financial investigation list as tough economic times continue to grip the country.

In the last eleven months, the number of those who could not afford to pay their consumer loans increased to over 826 000. When it came to credit card debts, over 744 000 thousand Turkish citizens failed to pay.

The total number of those who couldn’t pay consumer loans and credit card debt reached 1.2 million people in Turkey.

The Presidency of Strategy and Budget released the weekly report of the Weekly Development and General Outlook Report of Turkey which compiled the numbers that show a dire financial situation for Turks.

According to the report, indebted citizens who could not pay their consumer credit and credit card debt in the 11-month period of January to November last year increased from 1, 215 million to 1, 284 million people, as compared to the same period of previous year.

As the economic crisis was deeply felt in this period, citizens struggled to pay their consumer loans rather than credit cards. The report shows during the 11- month period, the number of those who couldn’t pay consumer loans increased from 137 000 to 826 000.

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Numbers of the indebted keep rising

It was found by the report that the months of November in 2017 and 2018 showed a year in year out of a tough economic climate for consumers. In November 2018, the date considered as a period of economic recovery, those who could not pay their consumer loans and credit card debts rose.

During this period, the number of those who could not pay the consumer credit increased by 34,1%, from over 79 000 to over 813 000. The number of those who could not pay credit card debts increased by 9,7% from over 70 000 to just over 77 000.

In November, the total number of those who could not pay the card and consumer debt increased from 133 000 to 164 000.

As of November 2018, 2,2 million people failed to pay their consumer loans and 2,4 million couldn’t pay their credit cards, both of these indebted groups fall under the financial investigation. While the total number of people who failed to pay credit card and consumer loans exceeded 4,6 million, the number of people with consumer and credit card debts stood at 3,3 million.

Turks spending less as economic strain takes its toll

Due to the economic hardships that Turkey has faced in the last year, more and more consumers, according to the report, are spending far less. As more consumers seek financial access, consumers’ request for loans increased continuously until July last year and climbed up to 421,5 billion Liras.

Last August, the Turkish Lira lost historical value against the US Dollar. As consumers cut their spending and reduce the use of credit, banks’ individual loan balance fell by 23,1 billion pounds and reduced to 398,4 billion Turkish Lira as of January 11, 2019.

A large number of Turkish people gave up using loans for vehicles, housing and other needs. Until last July, housing loans had climbed to 201,2 billion Lira. At the beginning of August, a crisis hit as housing loans decreased by 13,6 billion Lira and stood at 187,6 billion Lira as of 11 January. Vehicle loans went up to 7.2 Lira but, since August, the loan fell to 6.5 billion Lira.  Other consumer loans climbed up to 214,4 billion Lira prior to the crises, also suffered a loss of 10.1 billion Lira up to this month.

According to the report, the protested bill decreased 1,9% in the last eleven months of last year compared to the same period in 2017. However, the number of checks that could not be paid increased by 45,5% and reached 16.8 billion Lira from 11.5 billion Liras. In the same period, the number of unrequited checks increased by 22 percent and the number of unrequited checks increased by 60%, from 15.8 billion Lira to 25.3 billion Lira

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