The debt of the Czech population rose by a record 365 billion last year

The total debt of the Czech population rose by a record CZK 365 billion to CZK 2.97 trillion in 2021. The reason was the high demand for housing loans, according to data from the Banking and Non-Banking Register of Client Information, which CRIF – Czech Credit Bureau published at a press conference.

Housing loans increased by CZK 358 billion year-on-year to CZK 2.47 trillion. In a year, they increased by almost a fifth. However, despite the growing indebtedness of the population, the volume of non-performing debt and the number of people who defaulted on their loans decreased again. One hundred seventy-six thousand people defaulted on consumer loans and 116,000 on housing loans.

According to the company, the good payment morale is due to wage growth, which has more incredible momentum than the growth in average monthly loan repayments. While the average wage has risen by half since 2015, the average loan repayment has increased by seven percent.

The number of people defaulting on housing loans has fallen by a quarter year-on-year, namely by 3,174. The debt they were unable to repay fell by a fifth, to CZK 5.8 billion. The number of those who did not correctly repay consumer loans fell by 13,853, or seven percent. The volume of non-performing consumer debt fell by two percent to CZK 22 billion.

Problems in the Ústí and Karlovy Vary regions

Even at the end of last year, the best repayers of loans were people in their thirties and forties. In contrast, younger people had a more challenging time repaying consumer loans, and people over 55 had a more challenging time repaying housing loans.

Looking at the regions, the most reliable clients were residents of Prague, while the most significant problems were experienced by residents of the Ústí nad Karlovy Vary region. In the case of housing loans, they were three times more likely to default than clients in Prague, while the risk of default was twice as high for consumer loans.