ARIF – Nearly 650,000 unable to pay credit card, loan debts

Nearly 650,000 unable to pay credit card, loan debts The number of Turkish customers who were unable to pay their credit card and bank loan debts was over 645,000 in the first five months of this year, official data has revealed. Market experts warn that the figures threaten a credit card bubble in Turkey in the upcoming months.

Data from the Turkish Banking Union (TBB) shows that the number of people who failed to make their credit card and loan debt payments to banks increased by 25.4 percent to 645,474 in the first five months of this year compared with the same period of last year This number was 514,712 in the January-May period of 2013.

Among these bank customers, 380,180 failed to repay credit card debts, while banks could not collect personal loan debts from 265,294 people in the first five months. The number of non-performing personal loans was 28.

5 percent higher in the January-May period this year over a year ago. “The total size of credit card and loan debts was TL 41.

6 billion in May of last year, while this figure jumped to TL 77.6 billion in May of this year A potential domestic or external market shock will bring serious trouble to the banking sector this also refers to a credit card bubble with the potential to burst in Turkey,” commented Yeliz Karabulut, from Turkish securities firm ALB Menkul KIymetler Karabulut emphasized that Turkish customers tend to cover existing credit card and loan debts by borrowing even more.

She said that an anticipated rate hike by the US Federal Reserve, combined with geographical fault lines and lingering political tension at home, poses risks to fragile emerging markets such as Turkey. “Bank customers need to make sure their credit card spending is under control and that debts are paid on time in such a critical atmosphere,” Karabulut added.

Turkey has a poor savings record, and most businesses still depend on foreign cash inflows to keep the lights on in their workplaces.

SOURCE: Today’s Zaman