Impact of the COVID-19 Pandemic on the Consumer Credit Market in V4 Countries

Maria Czech,Blandyna Puszer

doi:10.3390/risks9120229

Abstract

The aim of this article is to analyse and assess the impact of the COVID-19 pandemic on the consumer credit market in the countries of the Visegrad Group (V4, i.e., the Czech Republic, Poland, Slovakia, and Hungary). There is no doubt that the pandemic has determined the amount of household debt due to consumer credit in the V4 group, and thus the question arises of how the pandemic affects the propensity of households to take out loans and the propensity to lend to them, and therefore whether it affects both the behaviour of borrowers and lenders. The study used the time series and multiple linear regression methods. The results of the study show that the Covid-19 pandemic has determined the level of household debt in the V4 group and is not indifferent to household decisions regarding taking out consumer loans. Although the research is preliminary, it has contributed to some extent to a better understanding of household indebtedness at a time of turbulence and instability resulting from health factors in V4 countries. In the future, this research will serve as the basis for future research on the phenomenon of household indebtedness in other countries.

Highlights

Households are economic actors that make decisions in the area of consumption, savings, and investments, with the use of credits or loans being a common way of financing consumption
The main objective of this paper is to investigate the impact of the COVID-19 pandemic on the value of consumer credit incurred in V4 countries, i.e., the
In the Czech Republic, Hungary, and Slovakia, the value of these loans was at a similar level, while in Poland the value of these loans was relatively high compared to the other V4 countries (Figure 1)

Summary

Introduction

Households are economic actors that make decisions in the area of consumption, savings, and investments, with the use of credits or loans being a common way of financing consumption. This is noticeable in relation to households in the Visegrad. Consumer credit allows a household to function at a higher level of consumption, on the other, it can be a vital resource for covering temporary shortages of funds (Wiśniewska 2016). The funds obtained allow for the improvement of household members’ living standards, and unexpected situations are often the factors that determine the use of credit (Bywalec 2009). It is worth highlighting that affluent people are more likely to borrow money than those who take out loans out of necessity related to poverty (Kata et al 2021)

Methods

Results

Conclusion