Polish debt

I’ve mentioned, or alluded to, a growing debt mountain in Poland many times before. Now I’m starting to see signs of people having difficulty repaying debt. I’m not sure I really understand the numbers being thrown around in this article, hopefully the original from Rzeczpospolita is clearer, but the general thrust is what I expected to see and suspect we will be seeing a lot more of in the coming months / years.

Will banks be exercising bad habits here in Poland because they can’t be seen to be doing it in other countries worse hit by the ‘credit crunch’ and they still want to try and get richer, quicker? Or will they have learnt their lessons and be displaying appropriate amounts of caution and due diligence here?

I wonder, is it actually possible for a bank to surprise me in a good way?


One thought on “Polish debt

  1. This article reeks of journalist exaggeration.

    “According to the Economic Development Institute of the Warsaw School of Economics, 41% of the public admitted to being in debt to a financial institution. ”

    (That includes me and my €35,000 mortgage secured on a zł. 2.3m house. I “admit” it.)

    Now the article throws in some other, disconnected figures:

    “Almost 10% admitted to having borrowed money from friends and family. ”

    Having lent money to ‘family and friends’ with various degrees of expectation of repayment, I’m still fairly sanguine at this stage of the article.

    “Some 53% of those in debt owe from zł.1,000 – 10,000. ” That’s 53% of 41% or 22% of society. Who owe a few hundred quid. Big deal.

    “Half of the public who have taken a loan pay monthly installments of between zł.200-500, while only 14% says that the installments stand at more than zł.1,000.” With average monthly salaries currently standing at zl.3,144, I really can’t see the nation’s financial system standing at the brink of collapse.

    “Some 11% of those polled, however, claimed that within 12 months they will have a serious problem with paying back the borrowed funds. ”

    How many of those 11% are Pan Ziutek who’s borrowed 800 zł from his aunt to fix his tractor, and how many are mortgage borrowers? The article doesn’t say.

    In contrast, only 17% of subprime borrowers in the USA ever made their first repayment.

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