Loans in banks in the Federation of Bosnia and Herzegovina recorded an increase in the first half of this year, reaching 14.2 billion BAM by June 30th, which is 597.3 million BAM more than at the end of last year.
Low income
According to the data of the Banking Agency of the FBiH, 7.2 billion BAM refers to the total retail loan, which is 325.7 million BAM more than in 2018. Many of them, as confirmed by the Agency’s data, have problems with repayment.
Economists point out that raising loans is the result of the drastically low wages of most workers. They claim that citizens are indebted for the loss of their jobs, reduced wages, unexpected expenses etc.
It is the same situation in Republika Srpska, the other entity in BiH. The RS Banking Agency notes that most loans go to general spending, with their debt climbing to 2.2 billion BAM, up 93 million from last year.
Loans are taken for almost everything from paying bills, to acquiring firewoods, registering cars, furnishing apartments and similar. Many people even borrow to repay old loans because, because of their low incomes, they are unable to repay them.
Budget burden
Psychologist Cedomir Novakovic points out that citizens are increasingly buying into the unprecedented and that through shopping cards they are massively paying for everything.
“The problem is they don’t see how much they spend. It has been proven that when you don’t give money out of your wallet, it costs a lot more,” Novakovic said.
