4 million in Turkey await debt restructuring

Spiraling inflation and cost of living crisis in Turkey makes it hard to pay back the debt in personal loans and credit card expenses, Sozcu newspaper reported. 

Data from the Banks Association of Turkey (TBB) Risk Center shows that banks started legal proceedings concerning the debt owed by nearly 750 thousand in personal loan or personal credit card debt in the January-May 2022 period, an 80 percent increase from the same period last year. 

In total, more than 4 million people have not paid their personal loan and personal credit card debt as of May 2022.

The number of people using personal loans, excluding non-performing loans, increased by approximately 1.7 million people in the last year and reached 36.1 million people.

Data shows that personal finance loans and credit cards account for 69 percent of the total volume of consumer loans and credit cards, which reached TL 1 trillion 207 billion as of July 22.

Experts warn that majority of these loans consist of relatively small amounts of consumer credits which indicates that more people in Turkey turn to consumer loans for their everyday essentials and fall into a spiral of debt.