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Serbia’s loan growth and debt trends: Significant increases in bank loans and arrears

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As of December last year, the total loans in Serbia, including those to the economy, entrepreneurs and citizens, amounted to 3.795 trillion dinars. This marks a 10.2% increase compared to the same period in 2023.

Loans to the economy reached over 2.090 trillion dinars, with legal entities borrowing 11.4% more than the previous year. Loans to entrepreneurs stood at 81.63 billion dinars, representing a 16% increase compared to December 2023, according to the Credit Report from the Association of Banks of Serbia. Regarding the population, citizens’ total debt to banks in December last year was 1.623 trillion dinars, an 8.4% increase from the same period in 2023.

Citizens’ most significant debt category was cash loans, totaling 779.88 billion dinars. Housing and home improvement loans followed, amounting to 694.67 billion dinars by the end of December. Agricultural loans were third, at 91.165 billion dinars. Other types of loans totaled 36.45 billion dinars, and consumer loans stood at 20.68 billion dinars. According to the Association of Banks, by the end of last year, there were 156,780 housing loan users in Serbia, with an average loan amount of 4.3 million dinars.

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The overall share of loan defaults stood at 2.5%. The largest arrears were recorded among entrepreneurs, at 4.7%, followed by legal entities at 2.7%. Citizens had the least amount of arrears, at just 2.1%.

Arrears for legal entities and entrepreneurs are defined as overdue obligations for more than 15 days, while for individuals, it’s over 60 days. Data from the Association of Banks show that the highest share of arrears in total bank loans in the past 11 years was recorded in 2015, at 18.6%. This figure dropped in 2016 to 11.5% and continued to decrease to 8.7% in 2017.

Regarding current accounts, there were 9.25 million accounts at the end of December, with 6.06 million active users. The average overdraft limit was 45,155 dinars. As of December 31, Serbia had 1.13 million credit cards, used by 917,431 individuals. The average credit card limit stood at 103,085 dinars.

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