Household Debt in Türkiye Hits Record High: Average Borrowing Surpasses Five Minimum Wages

Türkiye’s household debt burden has reached unprecedented levels, according to the June 2024 data released by the Banks Association of Türkiye (TBB) Risk Center.

• Total credit volume exceeded ₺20.4 trillion, marking a sharp rise compared to last year.

• The number of individual debtors surged to 42.4 million, an increase of 1.7 million in just a year.

• Average per capita debt rose by 39% in twelve months, climbing to ₺112,000, equivalent to more than five times the minimum wage.

Credit Cards Outpace Consumer Loans

The largest share of household debt came from credit cards, which soared to ₺2.3 trillion, overtaking consumer loans. Personal loans followed with ₺1.2 trillion. Meanwhile, non-performing loans surged by 92%, reaching nearly ₺539 billion, reflecting the growing repayment crisis.

• Credit card debtors: 39.5 million people, with an average debt of ₺58,543 per person.

• Overdraft accounts (KMH): 30.3 million users, averaging ₺19,996 debt per person.

Despite a decline in the number of consumers taking out new personal loans, repayment difficulties mounted. The ratio of non-performing consumer loans rose from 3.4% to 5.6% in one year.

Commercial Loans and Sectoral Risks

Corporate loans also expanded significantly, growing by 41% to ₺15.7 trillion. The agriculture sector recorded the steepest loan growth at 50%, but the highest level of non-performing loans appeared in construction (4.8%), followed by energy (3.7%).

The data underscores how shrinking purchasing power and economic instability are driving households deeper into debt, with banks reaping record interest revenues above ₺3.1 trillion from loans and credit cards.