Pet insurance

Croatians take more cash loans ahead of Christmas

In November this year, Erste Bank approved 20% more cash loans compared to the same month last year, the third largest bank in the Croatian market has confirmed.

This strong jump argues in favor of the growing demand of citizens for purposeless cash loans, which was recently discussed by the Croatian National Bank, and in the context of expectations of an increased contribution of personal consumption to the growth of the GDP in the last quarter of 2021.

It could also indicate an increase in consumer optimism in November this year compared to the same month last year. Banks have decided to respond to the increased demand, so there is almost no bank that does not promote this loan product in their promotional campaigns and on their websites.

This is partly an expected increase in consumption for the run-up to the holidays, but as the times are unusual, the usual trends are being watched closely.

These days, the banks are really bombarding us with advertisements for “affordable, fast cash”, with interest rates that have never been lower for this type of product, but which remain at levels that make this profitable product for banks, even in the face of rising inflation, around 4 to 7% interest.

Besides the fact that some people have spent more money than they have saved during the lockdown, some citizens are also taking aimless loans to buy anything and everything – various consumer goods, but probably also tinkering with the budget of households under rising price conditions.

Some banks have confirmed that citizens, with regard to cash loans, continue to demand Kuna loans, despite the fact that the euro is expected to be introduced in early 2023.

Privredna banka Zagreb also confirmed that in the last period there has been a continuous interest in cash loans and that “Kuna loans are predominant”.

OTP banka says that they are continuously recording positive trends in cash lending, and in the last quarter a slight increase in demand, which they believe is expected for this time of year, and given the pandemic and its impact on personal consumption.

In the monetary structure, Kuna loans are still the most represented, says OTP. And RBA is also seeing an increase in aimless lending to citizens throughout 2021. They say the demand for Kuna loans is generally higher compared to loans with a Euro currency clause, but in the last quarter there was an increase in non-purpose loans with a clause in euros.