President Recep Tayyip Erdogan said that citizens will be able to borrow from Ziraat Bankasi to pay back their card debt to banks.
Wednesday 09, January 2019
(Bloomberg) --Turkey’s biggest state-run bank will extend cheap loans to citizens struggling to pay off their credit-card debts in a populist move designed to boost the economy.
Ziraat Bank said in a statement it will offer loans for up to two years with a 1.1 per cent interest rate per month, less than half the cost of the retail loan rate on its website. Up to five years, the rate is 1.2 per cent per month.
Retail credit card debt in Turkey stood at TRL 103 billion ($19 billion) at the end of November, around four per cent of all loans in the country, according to the banking regulator. Credit card debt in danger of defaulting amounted to TRL 6.5 billion.
The Government is trying to boost a slowing economy through incentives, tax cuts and by helping to ease payment conditions on debt, after a plunge in the lira and a consequent spike in borrowing costs proved nearly as damaging as a failed coup attempt two years ago.
Turkish banks have already restructured around $20 billion of debt after the lira became one of the worst-performing major currencies last year, hurting firms’ ability to repay foreign-currency loans.