Pandemic takes its toll. Debts are rising twice as fast

According to the authors of the InfoDług report, prepared based on data by BIG Infomonitor Debtors Register and Credit Information Bureau, in April and May of this year, the first financial consequences of the pandemic were recorded. The number of delinquent debtors has risen by 30,500, and the increase has been seen in all provinces and age groups. Mostly in Subcarpathian and Lesser Poland provinces, as well as among people over 64. By the end of May, 2,864,080 people were behind their payments.

The data presented in InfoDług contain payments of at least 200 zloty and at least 30 days overdue, problems with credit installments are reported from the BIK database, and overdue bill payments - from BIG InfoMonitor Debtors Register. Experts stressed that the BIG register would be updated in the coming months with the impact caused by the lockdown, as there is a delay in reporting of new debts. Delayed credit payments, on the other hand, are visible immediately and that has contributed largely to the increase in the overall debt by 1,21 bln zloty.

"Compared to the definition of a bad bank loan, which assumes up to 90 days of overdue payment, these number show the changes faster, already after 30 days of delinquency. However, not all debtors who fail to deliver payment within 30 days extend the delinquency to over 90 days, some of them simply have temporary problems," chairman of BIG InfoMonitor Sławomir Grzelczak explained.

Grzelczak also indicated that although the lockdown impacted mainly working people, the most of the new delinquencies were among the senior citizens, and the least among the 18-34 age group. He added that the overall number of debtors in April and May has risen by 1,1 percent, and the group of debtors aged 64+ has increased by 2 percent.

According to a research carried out for BIG InfoMonitor in late April, nearly a third of Polish citizens have lost some of their income, and 5 percent declared they had no income at all. The latest data shows the pandemic has worsened the situation in 52 percent of households, when it comes to "covering everyday expenses". It also affected the savings - 47 percent of households declared partial loss of savings or no possibility to save any money.

The authors of the research also pointed out that the Poland's Overdue Payments Index (IZPP) has gone up from 90 to 91 points between the end of March and the end of May 2020. This indicator shows how many people per 1,000 citizens suffer from financial difficulties.

"It means that nearly 1 in 11 adult Poles has overdue payments," Sławomir Grzelczak said. The increase has been seen in nearly all provinces, except West Pomeranian and Warmian-Masurian, where the indicator stood at the same level as in the first quarter of 2020.

The IZPP index increase was caused by both late credit payments (27,735), and non-credit delinquencies, such as telephone or internet bills, alimony, court fees, or fines (22,670).

By the end of May 2020, the overall credit and non-credit debt in Poland amounted to nearly 81 billion zlotys (80,972,118,723 zloty). In April and May 2020, the number has increased by 1,2 billion. The debt from unpaid bills has gone up by 273,147,286 zloty (0,6 percent), whereas late credit payments by 939,349,291 zloty (2,5 percent). After this 2-month surge, the sum of non-credit debts equalled 42,9 billion zloty, while credit payments worth at least 200 zloty and overdue at least 30 days amounted to 38 billion zloty.

The average worth of overdue debt per person has increased in 12 provinces. Mostly in the Masovian province - by 326 zloty, up to 38,647 zloty - which is also the highest average in the country. Also high increase has been recorded in Kuyavia and Pomerania - by 218 zloty, up to 24,881 zloty, and in the Lublin province - by 168 zloty, up to 27,168 zloty. The highest average increase outside Masovia has been seen in the following provinces: Lesser Poland - 29,446 zloty, Łódzkie - 28,911 zloty, West Pomeranian - 28,893 zloty, and Pomeranian - 28,756 zloty. These averages are higher than the average debt per person on a countrywide scale, which in the end of May equalled 28,272 zloty.

Lubusz province has the most delinquent debtors per 1,000 adult citizens - 119. Western Pomeranian province has 118, while Lower Silesian province has 116. The lowest number of debtors in arrears was recorded in the Subcarpathian province - 51.

There is no central debt register in Poland. BIG InfoMonitor and BIK are private companies which, in accordance with the Polish law, collect, keep and provide access to information regarding overdue debt of individuals and companies.

Other companies collecting debt data are KRD Economic Information Bureau, ERIF Economic Information Bureau, KBIG Economic Information Bureau and KIDT (telecommunication debt information).