Italians and the loan boom: one in five is in debt
Man, over 40, employed in commercial activities on a permanent basis, two debts incurred due to personal loans for an amount between 10 thousand and 20 thousand euros: this is the identikit of the average indebted person in Italy. At a geographical level, the highest number of people with debts is found in Lombardy (16.14%), Lazio (11.84%) and Campania (9.24%). One Italian in five has more than four debts to pay and over half take at least two years to pay off their liabilities.
This is what emerges from the first Observatory on debt of Bravo.it – a fintech that operates in the management and settlement of private debts – which interviewed over 9 thousand people facing a debt situation, part of its customer base in Italy, to analyze the debt situation in the country.
“In 2023 the average debt per person was approximately 25,500 euros, up 6.6% compared to the previous year. Inflation and the high cost of living have increased the financial difficulties of Italians: they are in debt prevalence over 40 residents in the north with a stable job, because they have all the conditions that allow access to credit”, explains Daniel Martinez, Co-Country Manager of Bravo in Italy. “With a view to preventing situations of debt, it is important to acquire personal finance skills, find out about the conditions for applying for loans and financial products, set yourself constant and achievable savings goals, plan your expenses precisely based on your monthly income and expenses.”
The Observatory highlights some significant trends regarding the topic of indebtedness, tracing an overview of the situation in Italy. Two thirds of the debtors interviewed are men, 57% are aged between 40 and 59 years, but in the last year there has also been an increase of 3-4% of subjects between 30 and 39 years old, who represent 17.3% of the total.
The vast majority have a stable job, demonstrating how indebtedness is a transversal phenomenon and not limited to the most fragile categories. 69.7% of the analyzed sample has a permanent contract, mainly as employees in commercial activities and services (39%), followed by artisans and specialized workers (17.2%) and workers with office tasks (14 %). 14.7% are retired, only 5% are unemployed.
“People with stable jobs have a greater propensity to apply for loans both because often having a permanent contract is a fundamental requirement to obtain them (especially for high amounts) and because the feeling of stability leads to taking out more debts without considering that the income not only does not increase, but the purchasing power is eroded from inflation”, comments Cristina Cervantes, Co-Country Manager of Bravo in Italy. “To avoid falling back into a situation of over-indebtedness, the payment of debts should never absorb more than 20% of one's income, to avoid it becoming unmanageable in the time”.
Bravo's analysis also revealed that for almost 8 out of 10 people (77%) the causes of indebtedness concern personal loans (finalized and otherwise). The revolving card is indicated by 14% of those interviewed, while the credit card and bank credit are indicated by 6% and 2.5% respectively. This division reflects the variety of financial instruments used by people to meet immediate liquidity needs, but also highlights the need for prudent financial management to avoid the accumulation of debt.
Indebtedness, for over a quarter of Italians, exceeds 30 thousand euros – From the data collected by Bravo it emerges that over half of the interviewees (51%) take around 24 months to pay off debts, while 46.8% need a maximum of one year and 2.2% need at least 36 months.
According to the Bravo Observatory, one person in three (32.4%) finds themselves having to manage two debts, 26.7% only one, while 21.7% have three. As the number of debts increases, the percentages decrease: only 10.5% have four, 4.9% five, 3.8% at least six. As regards the amount of debt per individual person, in 18.6% of cases it is up to 10 thousand euros, in 32.1% between 10 thousand and 20 thousand euros, 20.8% between 20 thousand and 30 thousand euros, 20% between 30 thousand and 50 thousand and 8.5% over 50 thousand euros.
The geography of debt
Analyzing the sample interviewed by Bravo on a geographical basis, the northern regions show a greater presence of indebted people (43.6% of the national total) compared to the central (22.3%) and southern (34.1%) regions, which is explained by the presence of higher average incomes and more stable job opportunities in these regions compared to the rest of Italy, with a consequent greater ease of access to credit.
Most people in debt situations reside in Lombardy (16.1%), Lazio (11.8%) and Campania (9.2%). Followed by Piedmont (8.2%), Sicily (7.6%) and Emilia Romagna (7.1%). On the contrary, Valle d'Aosta records the lowest percentage, with only 0.23% of the population with debts to pay.
#Loans #Italians #gas #pipe #debts