SLOVAK households are among the least indebted within the European Union. The National Bank of Slovakia (NBS) attributes this to the short history of the household loan market, which only developed in a significant way from around 2003, the SITA newswire wrote.
Housing loans dominate the Slovak household loan market, making up approximately three-quarters of loans provided by banks. This is slightly below the EU average, but above the average in central and eastern Europe.
In September 2011, housing loans made up 74.4 percent of aggregate loans taken by Slovak households. Consumer loans made up 12.3 percent and debts to instalment sale companies made up 5.9 percent, followed by leasing companies with 2 percent. Credit cards and other loans accounted for 1.2 percent and 9.5 percent respectively.
The Slovak housing loan market has changed over the past 15 years. While in the second half of 1990s loans from housing construction saving banks dominated in Slovakia, the new millennium brought the development of mortgages offered by regular banks.
This has brought another significant feature: the dominant position of banks in the household loan market.
“The housing loan market is generally covered by the banking sector and this applies in Slovakia too,” the central bank wrote. “This is also the reason why the share of the total debt of households held by leasing companies and instalment sale companies is relatively small, at about 8 percent.
Moreover, this share has been shrinking over the last few years.”