March 12, 2019 Nearly 9 out of 100 adults fail to pay their financial obligations on time. In 2018, the total value of outstanding debt of Poles amounted to almost PLN 74 billion. This means an average of PLN 26,632 in arrears per person. Interestingly, the debt is growing despite the improving financial situation of Poles, a decrease in unemployment and the use of government assistance, e.g. the 500+ program. What is the reason for this?
Polish debt is still growing – the results of the 35th edition of the “Debt Info” report
In March 2019, the 35th edition of Knowlas 1 was released. It is a Polish nationwide report on persons delaying their obligations towards banks and other entities. In it, we find information about unreliable debtors entered into GIV InfoMonitor and BIK. The report includes debts past due by at least 30 days, whose value is at least PLN 200. The latest issue of Info Debt focused on comparing the situation at the end of 2017 and 2018. The results are quite disturbing.
According to the results of the study, at the end of 2018, over 2.78 million Polish and Polish men could not cope with timely repayment of credit and non-credit obligations, and the total value of outstanding debt was almost PLN 74 billion. This means that only a year was enough for the number of debtors to increase by almost 93.8 thousand, and the amount of arrears by PLN 6.8 billion. It is worth noting that in 2018 the amount of overdue liabilities increased by 10.2 percent, while the number of unreliable payers by 3.5 percent. As in previous years, there was a faster increase in the amount of arrears than the debtors themselves.
A clear increase in the average value of arrears of one person is visible. In 2018, it reached PLN 26,632. People with debts of at least 10,000 zł. accounted for nearly 41 percent. all unreliable payers. Less than 27 percent are debtors whose liabilities do not exceed 2,000 zł.
Over half of the debt is non-loan commitments
The report shows that we have GIVger problems with settling non-bank debts. Non-credit liabilities make up 54% (PLN 39.92 billion) of the total debt and loan liabilities 46% (PLN 34.04 billion). For this reason, in just a year, the number of unreliable debtors in BIK decreased by 12.5 thousand. (currently, there are 1,191,368 people in the BIK database), and the number of debtors reported to GIV InfoMonitor increased by 142.6 thousand. (currently 2,177,219 people).
Many Poles also have liabilities in several different financial institutions. The effect of this is an increase in the number of debtors who have trouble regulating loan installments as well as loans and current payments. There are currently over 591,000 such people, which is 21.3 percent. all indebted. The amount of such persons’ liabilities usually does not exceed 5,000. PLN, because statistically, the higher the average sum of arrears, the fewer people who simultaneously appear with negative information in the BIK and GIV databases.
We earn more, but we do not pay debts – we spend the money on consumption
Debt is visibly growing despite the improving financial situation of Poles, falling unemployment and using government assistance, e.g. the 500+ program. The GIV and BIK data show that we allocate higher salaries mainly for further consumption purposes and improvement of creditworthiness in order to incur debt for higher amounts. Statistically, so 88 out of 100 adult Poles have financial problems. There is also a large variation in the timely settlement of Poles’ obligations depending on where they live. The inhabitants of the western part of the country.
Most unreliable debtors are people aged 35-44 (among them every eighth person has a problem with overdue payments), but last year there were more debtors in all age categories. People aged 18-24 (over PLN 1 billion) increased their share in arrears to the greatest extent, however this age group is still the lowest percentage of debt in the country. The share of women has increased from just under 38% up to approx. 39% and now their average arrears reached PLN 22,609. For men, it is PLN 29 157. There are still only two women in the top ten most indebted people in the country.