Debts of Lithuanian population grew twice during a year
Since September 2007 debt portfolio of Lithuanian population increased almost two times from 146.5 to 273 million Litas. Natural persons have largest debts to legal persons such as banks, leasing companies and others. Debts are also growing in the business sector, as announced by a credit risk management tools provider company Creditinfo Lietuva.
“Current status is not critical, however, chain reaction of debt formation has commenced. In nearest future tempo of debt increase will depend upon expected appreciation of energy resources and slow down of consumption”, Mr Andrius Bogdanovičius, Director of Creditinfo Lietuva said.
Company’s data indicates thay debts of country’s population increased during the third quarter of this year by 10 times compared with the same quarter of last year – by 43.5 million Litas (last year – 4 million Litas). Debts to financial institutions have been increasing most rapidly and currently have amounted to 115.4 million Litas.
According to Mr. A.Bogdanovičius, not only debts of population increased comparing with the last autumn, but also did those of companies. Creditinfo data shows the increase of debts of legal persons from 73.6 to 473.6 million Litas. Companies have largest debts to financial institutions.
“The businesses have to slow down emerging debt spiral and reassess their credit risks management strategies. Companies should place more emphasis on control of increasing debt portfolio by paying considerable attention towards evaluation of client’s solvency – not limiting it to the moment of product purchase, but rather extending to all cooperation timeframe and monitoring client’s overdues, payments habits, etc.”, Mr. A.Bogdanovičius said.
The manager of Creditinfo Lietuva does not name the current situation as dramatic and states that companies taking care of their credit risks maintain stable mood. Panic is increasing only among those who do not control their risks.
“We are of the opinion that increasing debt portfolio is also increasing demand for complex credit risk management solutions, which include all stages of cooperation with the client from contract to payments. In addition, companies are starting to monitor in a more precise manner client’s solvency to be able to make clever decisions on time”, said Mr. A.Bogdanovičius.
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