Citizens borrow money despite high interest rates

The interest limit set by the Central Bank of the Republic of Turkey (CBRT) for consumer loans did not slow down the indebtedness of citizens. In the week of March 31, the consumer credit debt of the citizen, who is trying to earn a living by borrowing in the face of falling purchasing power, increased by 9.7 billion liras in one week and exceeded 815 billion liras.

INTEREST IS NOT AN OBSTACLE

The implicit interest limit set by the CBRT at 18.56 percent for consumer loans on March 10 caused the average interest rate in banks to rise 3.8 points to 30.35 percent in one week, and this interest rate paralyzed the use of consumer credit. However, although interest rates continued to rise in the following weeks and reached 32.26 percent in the week of March 31, the increase in the use of consumer loans continued. The citizen, whose purchasing power decreased, continued to use loans despite the high interest rate. While 2 billion liras in consumer loans were used in the week the CBRT implicit interest cap came into effect, in the following week, on March 24, 10.9 billion liras were used in general purpose loans.

INCREASE OF 9.7 BILLION LIRA

In the week of March 31, 9.7 billion liras of consumer loans were used. Citizens’ consumer loan debt reached 815.8 billion lira in total. While the total consumer loan debt is based on 1.3 trillion lira, when individual credit card debts are added, the total citizen debt has exceeded 1.8 trillion lira.