The total personal loan debt in Turkey reached TL 343 billion as of May 2014, according to recent figures from the Banking Regulation and Supervision Agency (BDDK).
In 2008, consumer debt amounted to TL 55.3 billion, a number which more than tripled to TL 182 billion by the end of 2013. As of May 2014, gross personal loans, including mortgage, automobile, credit card and other loans, had reached the TL 343 billion mark. Of that, mortgage loans came to TL 114 billion, automobile loans totaled TL 7.8 billion, credit card debt represented another TL 77.5 billion, and “other” loans amounted to TL 142.3 billion.
The number of consumers unable to pay their personal loans or credit card debt doubled from 429,000 people in 2009 to 913,000 in 2013. As of May 2014, an additional 532,000 were in danger of defaulting on loan or credit card payments.
According to a recent report from the Turkish Banks Association (TBB), the use of personal loans has shifted from Turkeys largest city of Istanbul and the capital city of Ankara toward Anatolia. The report indicates that the share of personal loans increased in 76 of Turkeys provinces by an average of 2.35 percent since 2002, while decreasing in Istanbul and Ankara, by 10.4 percent and 6.3 percent, respectively.
Recent statistics from the Central Bank of Turkey from the first week of July indicated that consumer credit and credit card usage continue to rise. Installment-based commercial loans increased 30.31 percent on a year-to-year basis while consumer loans rose by 15.99 percent.
TBB figures also indicate that the number of people holding consumer loans nearly doubled from 5.8 million in 2008 to 11.1 million in 2013.
A written statement from opposition Republican Peoples Party (CHP) Deputy Umut Oran from last week said that both public and foreign debt have also risen drastically since the early 2000s, when the ruling Justice and Development Party (AK Party) came to power.
Since 2002, total public debt more than doubled from TL 257 billion to TL 636 billion as of May 2014. Total foreign debt in the public and private sectors tripled, increasing from $129.6 billion in 2002 to $386.8 billion. In the same period, the price of bread doubled while the price of gasoline tripled and minimum wage earners sustained heavy losses in purchasing power. Personal loan debt is 127 times greater and credit card debt increased nearly twentyfold.
News reports from earlier this year indicated that the majority of those with housing and consumer loans come from lower-income groups. More than half of those taking out housing and consumer loans — a total of 10 million people — fall into the lower-income bracket, earning TL 2,000 or less monthly. Only 7 percent of those earning more than TL 5,000 a month took out housing and consumer loans while 14 percent of those with these types of loans earned between TL 2,000-3,000 per month.
Figures from the Turkish Statistics Institute (TurkStat) released last month indicated that just under 9 percent of those who committed suicide in 2013 did so due to economic difficulties or business failure. Some 200 people have reportedly committed suicide in Turkey due to credit card debt in the past decade.