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The number of loans granted in the Czech Republic is on the rise: credit score improves!

Despite the current rise in interest rates, Czech companies have not given up on the possibility of access to credit. According to CRIF-Czech Credit Bureau, corporate debt in February increased to CZK 49bn, the highest level in 25 years. In the period under review, the volume of loans increased by 9% compared to the previous year. According to CRIF analyst Věra Kameníčková: “The growth in business loans indicates increased demand, which is commonly associated with economic recovery. However, we are currently witnessing an increase in input prices, which could lead to many companies having difficulty repaying their loans.” Uncertain, however, is the intended use of the funds granted. In addition, corporate deposits have experienced a subtle year-on-year growth since 2021. Indeed, while at the end of February 2021 funds deposited in their respective accounts were 13% higher than in 2020, in February 2022 they were 7% higher than the previous year.

The volume of consumer credits shows rapid growth, not only from the business point of view but also considering the private sphere. Here, too, both the volume of savings and loans increased by 0.6%. In detail, private individuals had 3.07 trillion crowns deposited with banks and 2.02 trillion crowns borrowed. Real estate loans still dominate, accounting for some 80% of household debt, although the increase is expected to be moderate from January 2021. A contributor to this strong growth is surely the improvement in creditworthiness. For companies, while in January liabilities stood at 3.9%, in February they stood at 3.7%. For the same period, consumer credits ranged from 4.7% to 4.5% respectively.

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