Per capita credit debt in Türkiye surpasses $2.4K

Personal debt in Türkiye has reached alarming levels, with the average per capita credit debt surpassing ₺80,000 ( $2,388.77)  driven by a sharp increase in credit card usage and falling purchasing power.

Surge in personal credit debt

The Turkish Banks Association (TBB) Risk Center reports that as of June 2024, the number of individuals with personal credit debt increased by 2.1 million year-on-year, reaching 40.7 million. In the last month alone, 75,000 more people took on personal credit.

• Debt growth: The total credit debt surged by 49.7% year-on-year to ₺3.3 trillion. The average per capita debt jumped from ₺56,932 to ₺80,842 over the same period.
• Credit card boom: Credit card debt saw the most significant growth, with 2.6 million new credit cardholders in the past year. The total debt increased by 92.4% year-on-year, reaching ₺1.5 trillion. This pushed the average credit card debt per person from ₺22,534 to ₺40,386.
• Impact of high interest rates: Despite rising interest rates, the use of overdraft accounts (KMH) grew, with the number of users increasing by 1.7 million annually. The total debt in these accounts surged by 140.3%, reaching ₺298 billion. The average debt per person in these accounts rose from ₺4,468 to ₺10,140 over the past year.

First-time borrowers:

June 2024 saw a significant influx of first-time borrowers:

• 161,000 new credit card users
• 122,000 new overdraft account users
• 97,000 new consumer credit users
• 5,000 new mortgage users
• 22,000 new auto loan users

Istanbul has the highest shares of personal credit

• Top borrowing cities: The highest shares of personal credit were in Istanbul (28%), Ankara (10%), and Izmir (7%).
• Emerging debt hubs: Konya, Bayburt, Sirnak, and Siirt saw the highest increases in personal credit balances over the last year.
• Loan default rates: The rate of personal loans at risk of default stood at 2.2% as of June 2024.