In Poland, the volume of loans and credits taken out by borrowers is increasing steadily. By the end of 2023, the total amount of loans and credits for repayment reached PLN 727bn. This is PLN 5bn more than the previous year. Banks, credit unions, and lending institutions granted new commitments amounting to PLN 182.5bn, representing an increase of over 25% compared to 2022. The most popular were housing and cash loans, with banks granting respectively PLN 63.9bn and PLN 73.8bn. Most types of loan sales saw a double-digit increase. “The same economic and systemic factors that were positive last year will continue to have an impact on loan activity in 2024,” said Dr. Mariusz Cholewa, President of the Credit Information Bureau (BIK).
The credit market in 2023 regained vigor after a decrease in the value of the credit portfolio in the previous year. Poles borrowed more and more frequently, both from banks and non-bank institutions. Individual customer debt due to loans and credits increased by PLN 5bn, amounting to PLN 727bn at the end of December 2023. However, it was not a record year, as the debt in 2021 was higher by PLN 8bn.
In the value structure of household debt, two types of credit products dominate. Almost 70% of the portfolio (69.8%) is made up of mortgage loans worth PLN 507.3bn. Cash loans rank second, accounting for 22.2% of the portfolio and PLN 161bn.
In terms of sales dynamics, housing loans and non-bank loans were the clear leaders last year. The largest increase in sales in 2023 was recorded by loans for the purchase of real estate, on which banks and credit unions granted a total of PLN 63.9bn, up 40.5% from 2022. By contrast, non-bank loans reached a value of PLN 14.6bn, representing a growth of 58% year-on-year. The value of cash and installment loan sales also increased, by 13.7% and 26.7% respectively.
Several factors can explain Poles’ increased interest in credits in 2023: higher loan capacity compared to 2022, a decrease of 1 percentage point in the WIBOR rate, real wage growth from the second half of 2023, a stable and low unemployment rate of around 5%. Additionally, a regulatory factor played a stimulating role in the credit market in the second quarter of last year, namely the lowering of the buffer by 2.5 percentage points when calculating creditworthiness. From the third quarter onwards, the housing credit market was significantly stimulated by the systemic factor – the introduction of the government’s “Safe Credit 2%” Programme. “Taking all these aspects into account, the credit and loan market grew in all segments in 2023. The same economic and systemic factors as last year will positively influence this year’s loan activity,” emphasized Dr. Mariusz Cholewa.
The main incentive behind the changes, and the launch of the “Safe Credit 2%” programme, was the increased loan capacity of borrowers thanks to improving economic conditions and real wage growth, leading to a good run for housing loans. Demand for mortgages significantly revived, both directly as a result of beneficiaries of the Programme and indirectly among those who did not fulfill the formal criteria to use it.
According to BIK data, 92,600 people benefited from the “Safe Credit 2%” programme for a total amount of PLN 27.2bn. This represented 36% of the total annual value of the housing loan segment and over half (51%) in the second half of the year alone.
“We estimate that the value of the loan action in the mortgage loan segment in 2024 will be PLN 72.0bn. This is an increase of 13% compared to 2023, but still 19% less compared to the record year 2021,” pointed out the President of BIK.
In 2023, Poles took out a record number of 10.5 million installment loans for a total amount of PLN 22.9bn, an increase of 84.9% in terms of number and 26.7% in terms of value compared to 2022. Moreover, installment loans were even more popular among women and people under the age of 44.
“We estimate that the value of the loan action in the installment loan segment in 2024 will amount to PLN 27.5bn, which means an increase of 20% compared to 2023,” said the President of BIK, adding that 80% of the installments were amounts up to PLN 200.
When it comes to cash loans, according to BIK data, the number of new cash loans increased by 7.3%, and their value by 13.7%. In 2023, the value of newly granted cash loans amounted to PLN 73.8bn.
“For 2024, we forecast a further increase in interest in cash loans and cash loans, in the context of rising household needs as a result of still high inflation. A higher credit capacity will encourage the taking out of cash loans, for example for property renovations. We estimate that the value of cash loan sales in 2024 will be PLN 81.2bn, which means an increase of 10% compared to 2023,” predicts Mariusz Cholewa.
The level of quality of all repaid credits and loans for individuals remains at a stable safe level.
The quality of credits and loans is divided into two groups: those repaid in a timely manner and those overdue. Of the two, consumers struggled most with timely repayment of non-bank loans. People who had taken out installment loans fared the best with timely repayments.
In the case of housing borrowers, they managed the best with timely repayment. Their overdue credit ratio was 4.2% at the end of December 2023, an increase of 0.8 percentage point over 12 months.
According to BIK data, a total of 1,157 million credit accounts were covered by the loan holiday during its operation, amounting to PLN 286bn. The credit holiday affected the quality of the portfolio of zloty housing loans, limiting the possible increase in the loss ratio of credits granted before June 2022.
In general, the proportion of overdue loans and credits (the NPL or Non Performing Loans ratio) was 5.9% by the end of December 2023, an increase of 0.6 percentage point compared to December 2022.
