The number of bad or uncollectible loans to citizens, especially to companies, is increasing. It is expected that their amount, as well as their share in total bank loans, will continue to grow in line with the poor economic situation, writes novilist.hr
Thus, from the current almost eight percent, the share of bad loans in total bank loans could rise to around 10 percent by the end of the year, according to some estimates. This means that one in ten loans could be uncollectible, although citizens are still more reliable loan payers than companies. Consequently, banks have fewer and fewer potentially good clients to whom they can safely lend money.
More and more citizens are on interbank ‘black lists’ or are classified as over-indebted in the Croatian Credit Bureau (HROK), with no room for new loans. The level of indebtedness is also influenced by the fact that you are a guarantor for someone, all of which counts towards total obligations and reduces the chance of obtaining a new loan. Since there are generally fewer loan applications, and among them, fewer are ‘healthy’, banks have slowed down lending, and they are addressing existing problems as best they can – sending reminders, calling clients by phone, but already at the second unpaid installment, collection measures are activated, including wage garnishments and similar actions.
Larger banks have even established special organizational units within which employees deal solely with the collection of problematic loans, calling debtors, listening to their problems and reasons for non-payment, but above all reminding them of their debt to the bank, pointing out possible ‘exits’ and the potential consequences of prolonged non-payment of debt. (www.novilist.hr)
