Rising Debt โขAmong young Czechs Fuels Concerns Over Financial Literacy
Czech Republicโ is seeingโ a concerning trend: a significantโ increase in debt among youngโข adults, particularlyโ those under 24. Collection agencies saw a record number of receivables โคrecovered in 2023, surpassing levels seen since 2016, but the overall volume of debt recovered decreased to 30 billion crowns – a drop of three billion crowns year-on-year. Experts suggest this โindicates creditors are focusing on โrecovering smaller debtsโฃ alongside the larger ones.
Data reveals a 12%โ increase in “endangered debt” lastโ year,reaching 28โค billion crowns nationally. โA particularly sharp โฃrise is occurring within the youngest demographic. The total volume of unpaid โdebt for individuals under 24 yearsโ old has increased by approximately 25% compared to โthe previous year.
Thisโค trend โis highlighted by statistics showing over 177,000 individualsโค were struggling to repay consumer debts to banks and non-banking companies in the โขfirst quarter of this year, with an average debt of 165,640โฃ crowns perโ debtor.โข
The issue is particularly pronounced in theโ Liberec Region, where the average debt recovered from young peopel (18-24) is 27,900 crowns – significantly higher than the โaverage in Prague, which stands at halfโฃ that amount.
Experts warn that seemingly small debts can have long-lastingโค consequences. โJiลรญ Rajl, head of โa non-banking client โคinformation agency, emphasized, โ”when a young person takes a loan for a new phone at the age of 22โ and stops repaying it, this seeming small thing โcan complicate life for many years and come to hundreds of thousands of crowns.” he advocatesโข for improved financial literacy programs to addressโฃ the growing problem.
The increase in โฃcases handledโ by collection agencies is also linked to a recentโ legal โchangeโฃ allowing โthe โcessation of โขfutile executionsโ – those where no payment has been made for โsix yearsโข – prompting creditors to actively pursue recovery of outstanding amounts before โคthat deadline. The most common debts leading to collection action are unpaid bills and services, followed by consumer loans.