As of 2024, citizens of Montenegro have accumulated a debt totaling €2.2 billion, according to the Central Bank. A significant portion of this debt—43%—is attributed to cash loans, while residential and renovation loans account for 33% of the total credits for individuals.
Data from the Central Bank indicates a steady increase in citizen debt over the past three years. Total debt rose from €1.7 billion in 2022 to €1.8 billion in 2023, culminating in the current record of €2.2 billion this year.
Jelena Obradović from the Central Bank stated that, as of July 31, 2024, data submitted to the Credit Registry shows that 177,606 individuals have active debts from loans, credit cards, overdrafts, and leasing, amounting to €2.2 billion.
Economic analyst Oleg Filipović highlighted concerns regarding the banking sector’s profits, which currently surpass those of other industries. He warned that rising wages could lead to further increases in citizen debt.
Out of the total debt, €820 million—41%—is attributed to residents of Podgorica. Filipović expressed concern about these figures, given Montenegro’s total population.
“This data indicates that unfortunately, the country in which banks report the highest profits lacks a normal market structure. Over €2 billion in debt for a country with 600,000 residents, of which around 370,000 to 400,000 are adults, is alarming,” he remarked.
The Central Bank also noted that citizens have taken out €857 million in cash loans and €663 million for purchasing and renovating homes.
Most loans granted to individuals are cash loans, comprising 43% of all loans, while residential and renovation loans together account for 33%.
Following recent wage increases, Filipović anticipates additional borrowing among citizens.
“You can see various promotions that banks are using to attract customers and capitalize on the trend of rising wages. However, it’s essential to consider not only the banks but also the factors that have driven up real estate prices. The government needs to respond in two ways: one is to limit financial product prices, and the other is to influence a decrease in both rental and property prices, at least for local residents,” he suggested.
It remains to be seen whether the Investment Development Fund will be transformed into a Development Bank, potentially offering further benefits to individuals, Filipović concluded.
