The growing trend of total debt in Bosnia and Herzegovina continues. While a number of citizens are drowning in debt, others keep billions in their accounts. Total loans at the end of last year amounted to 23 and a half billion BAM, while at the same time deposits reached as much as 31 billion marks.
In 2023, citizens and the economy borrowed almost 1.5 billion BAM from commercial banks. Citizens borrowed the most, taking non-purpose consumer loans.
Central Bank of Bosnia and Herzegovina
“Annual credit growth was registered in the household sector by 813.4 million BAM, in private companies by 612 million, in non-financial public companies by 9.6 million and in other domestic sectors by 58 million BAM”.
Economists agree. The growth of placement of consumer loans is generated by several factors, but one of the main ones is inflation, due to which citizens solve their illiquidity by borrowing from banks. What is also not good is that consumer loans of citizens dominate the overall structure of loans.
SAŠA GRABOVAC, President of the Association of Economists “SWOT”
“The diminishing spending power of a large part of the population, which is forced to compensate for all deficits, i.e. all deficiencies of financial resources, through consumer loans, which should be said to be the most unfavorable type of debt, i.e. the most expensive. However, for a large number of citizens, there is no alternative”.
MILENKO KRAJIŠNIK, Dean of the Faculty of Economics in Banja Luka
“It can be worrying that loans for economic activities are being replaced by consumer loans of citizens. Banks strive to place funds. That’s their job. But it is not good for the economic growth and development of the country”.
Increasing indebtedness of citizens is not only our phenomenon. It is also a trend in much richer countries. Sociologists have the term McDonaldization for this phenomenon.
VEDRAN FRENCH, sociologist
“Man, even today as a being, is simply prone to challenge. Everything he sees is necessary for him. Of course, it wasn’t like that a few decades ago. Much less money was spent on, let’s say, unnecessary things, whereas today in the 21st century, in the era of consumer society, the term McDonaldization is often used. We as individuals today can hardly resist that.”
In order to survive for a month and fill the holes, most citizens resort to financial acrobatics, borrowing from banks and microcredit organizations. In the end, they have to pay installments in addition to running costs, and thus enter a vicious circle, BHRT writes.
