Data from three different registers indicate that by the end of the first half of this year, there were between over 2 million to 2.6 million indebted consumers in Poland. Two sources reported year-on-year decreases of less than 10%, while another showed less than a 1% year-on-year increase. Depending on the source, the average debt during this period ranged from approximately 20,000 PLN to almost 33,000 PLN. The highest debt levels were found among those aged 45-55, according to all analysed data. According to the National Debt Register, the maximal debt of Poles in the first half of this year was identical to that of the previous year, standing at nearly 76 million PLN.
By the end of the first half of this year, the debt register BIG InfoMonitor and BIK credit information database showed 2.6 million indebted Poles, a fall of 3.3% from the 2.7 million recorded the previous year. In the National Debt Register (KRD), there was a year-on-year decline of 9.6% – from 2.3 million to 2.1 million. Meanwhile, in the ERIF Economic Information Bureau (excluding alimony debt), the number of people with arrears remained at last year’s level – 1.5 million. However, a detailed look at the data shows a 0.2% year-on-year increase. Thus, the registers show between 2.1 million to 2.6 million indebted Poles.
“These registers collect data in different ways which is why there are discrepancies between them. However, looking generally at the results, one can conclude that consumers are handling their debt better. Some people have moved away from the financial precipice. And that’s why – in my opinion – falls in the two aforementioned sources were recorded”, comments Dr Łukasz Goczek from the University of Warsaw.
On the other hand, Adrian Parol, a legal counsel and restructuring advisor, believes that the situation of many debtors has improved thanks to state aid. “The benefits for parents rose from 500 PLN to 800 PLN per month earlier this year. Furthermore, many people have received pay rises from their employers. Some consumers have also cut back on instalment purchases and deferred payments. Therefore, the aforementioned results – in my opinion – are not the result of better debt servicing by Poles”, the expert claims. At the end of the first half of this year, the BIG InfoMonitor debt register and the BIK credit information database recorded an average debt of 32,900 PLN. This was up by 9.4% from the previous year’s 30,100 PLN. Meanwhile, the KRD recorded an average debt of 21,300 PLN, an increase of 8.4% on the previous year’s figure of 19,700 PLN, while in ERIF BIG it was 19,500 PLN, up by 5.5% from the previous 20,600 PLN recorded at the end of June this year.
“The number of debtors has decreased in two registers, and has only slightly increased in one. Meanwhile, the average debt has increased everywhere. From this one could conclude that the debts of some people listed in these records have grown. And this looks unsettling. It could be increasingly difficult for such consumers to escape the debt spiral”, analyses Łukasz Goszczyński, a legal counsel and restructuring advisor from the GKPG Law Firm.
Dr Mariusz Bołoz from the University of Management and Banking in Krakow also notices the worsening situation for existing debtors. As the expert maintains, the main cause of this phenomenon are the rising costs of living due to high inflation in recent years. Another problem is the low or non-existent savings of many Poles. In such a situation, even temporary financial problems, for example due to illness, lead to arrears in repaying obligations.
By the end of the second quarter, in the debt register of BIG InfoMonitor and the BIK credit information database, the highest average debt was for people aged 45-54 – 46,500 PLN (last year – 42,500 PLN). In KRD, it covered Poles aged 46-55 – 30,400 PLN (previously – 28,100 PLN). Meanwhile, in ERIF BIG (excluding alimony debt), the age group 45-54 recorded 12,200 PLN (last year different age ranges, 45-59 years – 11,600 PLN).
“The results from all registers are alarming. They show that debtors aged 45 to 55 take on the greatest financial burdens. Average debts ranging from more than 12,000 PLN to nearly 47,000 PLN are very serious indeed. In many cases, these debtors are probably parents who are trying to give their growing or already adult children the best possible start, despite difficult times and often limited possibilities. This is not presumably an age group that is running up debts for exotic holidays or luxurious cars, although one cannot exclude such cases”, says Attorney at Law Adrian Parol.
Taking gender into account, by the end of the first half of this year, the average debt of men in KRD amounted to 24,900 PLN (the previous year – 22,600 PLN), while for women it was 14,900 PLN (14,400 PLN). Meanwhile, in ERIF BIG (excluding alimony debt), these figures were 10,300 PLN for men (previously – 9,600 PLN) and 11,200 PLN for women (the previous year – 10,500 PLN).
“Women are generally more cautious about taking on any debt, which translates into potential later repayment problems. As they often manage household expenses, they need to plan more carefully for the future. Meanwhile, men take a much more relaxed approach to these types of obligations”, indicates Attorney at Law Łukasz Goszczyński.
Looking at additional data, it’s noticeable that the maximum debt in KRD in both analysed periods was the same, amounting to 75.7 million PLN. According to Adrian Parol, the maximum debt of Poles will increase in the future. “More and more people are having financial liquidity problems. Some consumers may try to refinance their current obligations with increasingly expensive loans and credits. And in this way, they will get caught in a debt spiral”, he believes.
As stated by Dr Mariusz Bołoz, multimillion Polish Zloty financial arrears of individual debtors are usually created as a result of not repaying bank loans. Large amounts generally relate to entrepreneurs or farmers – usually people with high creditworthiness when taking on liabilities. The causes of these types of arrears can result from both failed investments and problems with the debtors themselves recovering debts from their contractors.
“In my opinion, this year the situation of debtors will be heterogeneous. That means, a part of them will end up heavily below the line. Others will cross that line and break even, because it will be easier for them to meet their obligations. High interest rates definitely encourage people to pay off their debts. At the same time, there are more and more fintech tools on the market that allow for deferred payments and hence, thrust many people unnecessarily into debt. Of course, everything will ultimately depend on each Polish debtor’s individual life situation and attitude”, explains the expert from the University of Warsaw.
On the other hand, Dr Bołoz predicts that in the near future, we should expect an increase in the number of debtors in Poland. This will be mainly due to the continuously growing costs of living and the distant perspective of reducing interest rates. Another reason will be the increase in excessive consumption. As the expert from the WSzZiB in Krakow emphasises, this phenomenon has been visible for many years and mainly concerns young people under 25. They can easily take on debt, for example by choosing deferred payments when shopping online, but they are not fully aware of the consequences of not repaying it.
Source: https://ceo.com.pl/spada-liczba-zadluzonych-polakow-ale-za-to-rosnie-sredni-dlug-do-oddania-63315
