Credit indebtedness did not explode, banks played with caution, so as not to reach an noncollectable scenario.


Cedomir Savkovic

Citizen indebtedness in Serbia is on the rise, but it hasn’t reached an alarming level yet, as experts explain the latest data from the Association of Serbian Banks (UBS). In the month from the end of June to the end of July, debt increased by 114 million euros, from 10.705 billion euros to 10.819. Compared to the same period last year, it jumped by 1.14 billion euros.

Serbian citizens owe banks funds from cash, consumer, housing and agricultural loans, according to UBS.

It is interesting that the number of overdue credit cards used by citizens has also increased in the last year, by about seven thousand (from 51,687 to 58,954).

The average debt on consumer loans, according to UBS data, is 123,000 dinars, or about 1,000 euros. On top of that, a share of the population is currently paying off other types of loans of about 500 euros. This data is obtained when the amount of debt is divided by the number of inhabitants.

Dušan Uzelac, a financial consultant and editor of the Kamatica portal, says that the citizens of Serbia are still not too indebted because the National Bank of Serbia (NBS) has implemented strict borrowing regulations that have been in force for a long time.

He says that the autonomy of banks regarding loan approvals can be a double-edged sword, because some accept clients who may not be able to repay the loans.

Credit indebtedness did not explode, banks played with caution, so as not to reach an noncollectable scenario, Uzelac notes.

He also suggests this indebtedness is not a trend, but a current moment:

‘These statistics have a built-in error from the period of the moratorium on loan repayment (state measure during the pandemic). Essentially, all those loans that were supposed to be repaid in full were extended, and many people re-entered debt. ‘

Uzelac notes that it is difficult to make comparisons between Serbia and Europe, in terms of citizens’ indebtedness. He emphasizes that euro loans in Serbia are quite balanced with European loan prices:

‘It is easy for banks to acquire money. For that reason, they do not give any interest for citizens’ savings, but the interest rates on loans are low.’

As an example of the so-called globalization of banking, according to which everyone shares the same fate, Uzelac cites Croatia and Serbia, two countries in which the share of housing loans is the same and amounts to about three percent:

‘You have a very efficient flow of capital and money. What is specific about us is that we are not a member of the Eurozone. We have favourable loans, however, and that is the result of increased trust in Serbia. Wherever there is capital, the price of money is calculated in relation to placement risk.’

Investing in Serbia in terms of risk and stability is at the level of investments in the Eurozone, and according to Uzelac, this calculation is what is providing for our interest rates.

He says that small businessmen dominantly finance liquidity and make ends meet, due to the unfavourable situation on the market.

‘Medium and large people are wiser to borrow for business activities that will generate income and profits’, says the editor of Kamatica.

The participation of citizens in late loan repayment is now around 2.5% and is lower than before – since 2015, when it was 7.3%, it has recorded a steady decline.


Cedomir Savkovic, journalist at Nova Ekonomija