Low income households fall into spiral of debt in Turkey

As rising inflation and falling purchasing power make it difficult for low-income households to manage the cost of living crisis, more people in Turkey turn to consumer loans for their everyday essentials and fall into a spiral of debt, Sozcu newspaper reported.

Individual loan debts, including credit cards, rang alarm bells as the unpaid consumer debt increased by 55 percent to 30.5 billion Turkish liras in the first 5 months of the year, according to the Banks Association of Turkey Risk Center.

As of May 2022, the number of people who are subject to legal pursuit for not being able to pay their debts has reached 4 million 147 thousand 977.

60 percent of the individual loans consist of relatively small amounts of consumer credits.

“These people don’t take loans to buy cars or houses. Most of the loans are around 50.000 - 100.000 TL, which shows that people take these loans to save the day, to be able to buy their daily necessities” said Zehra Tükenmez, Credits Unit Manager at Interactive Credits.