Over a Tenth of Czechs are Riskily Indebted

The proportion of people in the Czech Republic who are riskily indebted has slightly increased compared to last year. It now stands at eleven percent, while it was ten percent last year. The increase is most prominent in the age group of 36 to 44 years. In terms of education, people with vocational training are the worst off.

On the other hand, younger individuals and seniors are the most responsible. “From a regional perspective, Prague residents are the best off with seven percent, which is due to higher incomes,” said Michal Straka from the Ipsos agency, which processed the data in a survey for the Czech Banking Association.

Risk indebtedness is considered when debtors borrow for purchases even though they have no chance to save; they have three or more loans and take other loans to pay installments. The risky indebtedness of people between their thirties and fifties is mainly because they often repay apartments or loans for their equipment.

Outside of Prague, ten percent of people in Bohemia are riskily indebted, and in Moravia, it is twelve percent. According to Filip Hanzlík from the Czech Banking Association, the worsened situation has positive sides. The number of people who behave riskily only minimally is growing. Last year, it was 33 percent; this year, it is even 42 percent. “Caution is spreading in Czech society,” says Hanzlík.

In the case of inability to repay, seven percent of the population would solve the situation riskily. Last year, it was eleven percent. “A large group of people do not check whether such a company has a license from the Czech National Bank when arranging loans with non-banking companies. The level of risk in such cases significantly increases, and the debtor can easily get into an unpleasant situation,” added Hanzlík.