Czechs are not afraid of loans, they believe in their repayment

Buying goods or services on credit is a matter of course for most Czechs. 60% of people have experience with it. At the same time, most of them state that they are not afraid of repayment problems. Nor does the Czech Banking Association see space for unnecessary concerns. The payment discipline of the Czech Republic’s population is still very good in international comparison.

In February of this year, based on a commission from the Czech Banking Association, SC&C conducted a survey to answer, in particular, questions concerning the attitude and behavior of residents in relation to credit and installment purchases. 1,028 respondents aged 18 to 79 were addressed. The survey focused mainly on the calculation of the risk indebtedness index.

Risk indebtedness affects 1.58 million people

Risk indebtedness affects 1.58 million people

Interesting is the methodology by which the Czech Banking Association assesses the riskiness of debt. It might seem to be a very sophisticated and complicated method, the opposite is true. Very simply, anyone can find out whether or not their debts are risky by answering the following questions:

  • Are you willing to cover the installments with another loan? 2 points
  • Would you solve your insolvency with another loan? 2 points
  • Are you currently paying 3 or more loans? 2 points
  • Have you borrowed money in the absence of long-term funding? 1 pt
  • Have you ever borrowed money for consumption or entertainment? 1 pt
  • Have you ever borrowed money from a non-banking institution or an individual? 1 pt

As a consumer at risk, he or she will receive 4 or more points when answering the above questions. The index of risk indebtedness, which is recalculated to the entire adult population, reaches 20 percent, which is two percentage points more than last year. Of the adult population, 1.58 million people are at risk.

Young people are mainly in debt

Young people are mainly in debt

The survey showed that risky lending mainly affects young people between 18 and 34 years of age and usually with lower educational attainment. They often take credit from multiple providers. It is interesting to look at the reason why people buy on credit and installments.

Almost half (49%) said the lack of cash was the reason, 15% of people are unwilling to save money because they want the goods immediately, and 14% of consumers hear from the lenders in the form of, for example, zero interest.

Consumer loans, resp. People prefer to deal directly with the seller or provider of the loan. 83% of respondents expressed their opinion in this respect. Although it is very often possible to arrange credit online, only 12% of shoppers use this option.

The survey also shows that the Czechs are quite clear about what they are worth buying on credit and what not. 82% of people would never take a loan for an experience or vacation. A similarly high number of consumers (87%) say they would never have taken a loan to cover another loan.

Czechs are not afraid of repayment


Almost 69% of respondents are not afraid of repayment problems. This view is supported by the favorable economic situation and the related wage growth. And the fact that the total debt of the Czech population is growing, but the repayment problems are decreasing, is really not so bad.

The Czechs consider safe repayments to be no more than one fifth of their net monthly income, which is a reasonable consideration for experts. On the other hand, quite a lot of people, specifically 15% of respondents, do not solve the repayment amount at all and consider it a “detail”.

Should a situation arise where one would not be able to repay, most would resolve it by arranging a deferral and possibly consolidating loans. The survey showed that in these cases, people who already have experience with a loan would behave differently from those with no experience. The first group would prefer a loan with a bank or non-bank provider, while the second group with no loan experience would prefer consolidation or informally ask family or friends for money.

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