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Fates of indebted households during the Corona crisis: Survey results from Slovakia

Andrej Cupak, Martin Cesnak, Jan Klacso and Martin Šuster

No OP 2/2021, Working and Discussion Papers from Research Department, National Bank of Slovakia

Abstract: A satisfactorily small share of households expects serious difficulties in resuming their debt instalments after a payment moratorium is lifted. As documented across six waves of a survey administered by the National Bank of Slovakia on indebted households, the payment moratorium programme was very important. Many households have suffered negative income or employment shocks, and the moratorium conserved household liquidity during the crisis. Loan payment deferral was used mainly at the beginning, and gradually households preferred individual agreements with their banks. The Covid-19 crisis disproportionately affected households that were highly indebted already before the crisis, working in sensitive sectors, less educated, or with large drops in income. As a result of the crisis, vulnerable households plan to keep higher financial buffers to cope with future risks, as well as better diversifying their income activities to less vulnerable sectors.

JEL-codes: C20 E44 G18 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2021-06
New Economics Papers: this item is included in nep-mac and nep-tra
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