By Vesna Peric Zimonjic
BELGRADE, Dec 14 2006 (IPS)

‘You cannot put off the coming holidays until next spring, but you can put off your debts’, goes an ad launched widely by a bank.

The bank offers a single credit that would ‘unite’ debts and make it possible to pay back everything in due course.

Other banks invite customers to ‘instant’ credit without much waiting and checking, “to make the simplest dreams come true.” So, buy new house appliances, take holidays, renovate a home, or buy a new car. After years of deprivation and poverty, Serbs are going for all this – and plunging into debt.

“This is something well known in the developed countries, but was relatively unknown here,” analyst Misa Brkic told IPS. “On one hand people want to improve their lives after years of deprivation, on the other they sink deep into debt without much thinking. Then the problems arise.”

The Central Bank of Serbia says that on average an employed person owes 1,080 dollars to some bank – three times the average monthly pay.

“It is not the amount of such debt that worries experts,” Central Bank Governor Radovan Jelasic told reporters in Belgrade. “It’s the fact that the number of credits approved by banks has doubled in a matter of one year only, with a trend of further growth.”

According to the Bank, the number of loans given in 2005 was larger than the total number approved by banks in five years since 2000.

A similar trend has emerged in Slovenia, the only former Yugoslav nation that is a full European Union (EU) member.

The Governor of the Slovenian Central Bank, Mitja Gaspari, told local economists that individual debts by Slovenes have grown ten times in the past ten years. Currently, they stand at an average of 2,643 dollars.

“An average family owes six average salaries now, while in 2008 we prevision this to grow to 13 average salaries,” Gaspari said. The most popular credits are for new homes or cars in the nation of two million.

The situation in Croatia is even more dramatic. An employed Croat now owes on average 3,603 dollars to the banks, in a country whose economy is poorer than Slovenia’s.

Croatian daily Glas Istre reports that some 500,000 people in a country with a working force of 1.5 million have taken credit of some kind. The paper has also revealed that some 10,000 people are paying back debts for others they stood guarantee for.

Croats borrowed 6.4 billion dollars this year for new homes, and another 7 billion dollars cash, much of it for new cars.

Croatian media has been flooded of late with stories of people unable to repay debts. A particularly dramatic one was that of Jakov Buzolic (55) from the coastal town of Split. He put an ad in a local paper offering his healthy kidney for sale, even though trade in organs is illegal in Croatia.

After taking one loan after another for reconstruction of his house, Buzolic has reached a point when a single monthly instalment is three times his monthly income.

“I have no other property and nothing to sell, nowhere to borrow again,” Buzolic said. “My wife has left me, as well as my daughter and my son. This (kidney sale) is the only way for me to solve the problem.”

The only nation in the Balkans where loans are not very popular is Bosnia-Herzegovina. It has the lowest average debt at some 400 dollars. Jobs are scarce, and so consequently are loans, and friends or next of kin who could stand guarantee.

A popular joke goes that the most wanted men in Bosnia are not the war crimes indictees Radovan Karadzic and Ratko Mladic, but guarantors for credit.

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