"My life is spent on loans", Kosovars with debts up to their necks - this is the value of loans
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"My life is spent on loans", "Money is like usury", these are some of the complaints of Kosovo citizens, who say they experience pressure and stress from commercial banks for returning financial assets with high interest rates.
The number of borrowers during 2024 has reached over 36 thousand, who have turned to commercial banks in Kosovo to obtain loans. This figure is over a thousand higher than in the same period of the previous year. While the total amount of gross loans in the banking sector until December of the previous year has reached 5 billion and 810 million euros, with an increase of over 131 million euros or 2.32 percent compared to the previous month, KosovaPress reports.
Of the total amount of gross loans, households account for about 2 billion euros, and enterprises for about 3 billion euros.
Meanwhile, according to the latest report of the Central Bank of Kosovo, the value of new loans in December reached 264.1 million euros.
The CBK announced to KosovaPress that the average interest rate on new loans during the period January-October 2024 is 6.16 percent.
But the citizens' 'plight' for financial resources is pushing them to take out loans from the country's commercial banks.
Citizen Imer Bajgora says that since the war he has been forced to take out loans, as he puts it, "to free himself," since, according to him, his salary is not enough. In this regard, he complains that the interest rates are too high.
Skender Preniqi considers credit necessary, but harmful in financial terms. He says that to buy an apartment or a car, credit is needed, because, as he says, salaries are low.
Adem Veseli talks about the stress he experienced when he took out a loan. He says he will never go into debt again, because according to him, "it's a catastrophe."
Meanwhile, the Central Bank of Kosovo (CBK) tells KosovaPress that the total number of borrowers is 36 by October 60, or 2024 more than in the same period last year.
"The number of borrowers for the period January 1, 2023 to December 11, 2023 was 35,029, while for the period January 1, 2024 to December 11, 2024 it is 36,060. An increase of 1,031 borrowers or 2.94% in 2024 compared to 2023. The average interest rate on new loans during the period January-October 2024 is 6.16%, while in the same period of the previous year it was 6.49%," they say in a written response from the CBK to KosovaPress.
Meanwhile, banking sector expert Milazim Abazi estimates that the increase in loans in Kosovo represents development and strengthening of the material position of citizens.
Abazi tells KosovaPress that competition in the banking sector should increase, with the arrival of Europe's most powerful banks.
Meanwhile, economic expert Musafë Kadrijaj says that personal finance management among Kosovo citizens is not at the proper level. He calls it scandalous to take out loans to buy a car or go on vacation.
In addition, Kadrija emphasizes that high loan interest rates in Kosovo are increasingly damaging businesses.
Meanwhile, around 160 million euros is the net profit of commercial banks from January to October 2024.
In addition to the increase in loans, customer deposits (savings) in December of last year reached 6.92 billion euros, an increase of 342.77 million euros or 5.21 percent, compared to the previous month.
Of the accumulated value of customer deposits, about 28.89 percent are term deposits. By sector, households dominate with about 65.09% of the total value of savings or about 4.51 billion euros.
