The rise in the prices of basic foodstuffs, clothing, footwear, fuel, has obviously forced the citizens of Bosnia and Herzegovina (BiH) to raise even more loans, to be able to ensure their existence.
Citizens, in order to meet basic needs, raise loans, as evidenced by statistics kept by the Central Bank of BiH.
Namely, when it comes to total loans in BiH, they amounted to 20.83 billion BAM at the end of August and increased by 14.2 million BAM compared to the previous month. Credit growth was registered in the household sector, by 40.5 million BAM, and public companies – 3.9 million BAM, while the decline was registered in the sector of private companies, government institutions.
The annual growth rate of loans in August was 2.4 percent or 491.9 million BAM. According to the data of the Central Bank of BiH, the annual growth of loans was registered in the household sector by 403.5 million BAM, private companies by 105.9 million BAM, and government institutions by 36.8 millionBAM.
Given that not all citizens are creditworthy and often do not meet strict banking criteria, it has become common that citizens borrow from microcredit organizations, at dizzyingly high interest rates.
It sounds incredible, but it is true that people borrow 400 BAM, which they have to repay with a high interest rate of 220.5 percent, and that is legal. Namely, one microcredit organization registered in Republika Srpska (RS), according to the data of the RS Banking Agency, offers a loan of up to 400 BAM with a repayment period of 31 days to three months. So, the one who takes 400 BAM for three months must return a total of 555 BAM.
Economist Admir Cavalic explained that market trends and new economic conditions lead to a change in consumption patterns, consumer habits, and the behavior of the population.
”In this context, these data should be observed. The growth of microcredit for the purpose of non-purpose consumption shows that citizens must compensate for the low standard of living in this way. What is important to mention is that the banking sector is, naturally, more conservative in this period, so it is not surprising that microcredit services have grown – they have emerged and are organically linked to periods of crisis, ” Cavalic stressed.
In the first half of this year, the amount of microcredit forcitizens increased by 13.7 million BAM and amounted to more than 409.1 million BAM. The most common are loans for other purposes – for pensioners, financing the general consumption of citizens, non-purpose cash loans, commodity loans, and the like. Their share in total loans is 53 percent, with growth at a rate of 10 percent.