Solus: Over 8% of Czechs don't pay debts on time

Prague, Jan 24 (CTK) - The number of Czechs unable to pay their debts on time grew moderately further in the last quarter of 2012 and at the end of 2012, 8.05 percent of adult Czechs had overdue debts, compared with 7.93 percent at the end of September, association Solus informed CTK Thursday.

Payment discipline worsened in all regions. Solus membership offers to its members access to information about clients who had or still have problems with paying their debts.

Macroeconomic factors like a lower number of seasonal jobs and higher costs of living cause a moderate worsening of the situation in the last quarter of a year.

"The development of cases of negative debts when clients are unable to pay them and are listed in Solus negative register was constant in the course of the whole year 2012," Solus secretary Jan Stopka commented on the statistics.

The situation is bad in the long term in particular in the Ustecky and Karlovarsky regions where 14 and 15 out of 100 people, respectively, were unable to pay debts on time.

Debt defaulting differs significantly also in individual districts. While, for example, in the Ceska Lipa district 14.62 percent of the adult population was unable to pay debts on time, in the district of Semily it was only 6.62 percent.

Solus registers the absolutely highest debt defaulting rate in the districts of Most (16.96 percent), Sokolov (16.83 percent) and Teplice (16.05 percent). On the other hand, the district of Zdar nad Sazavou with just 4.46 percent is the best off.

"Real incomes of Czech households were falling in the last two years, real wages in 2012 dropped by almost one percent. At the same time, unemployment returned above 9 percent and new jobs are being created only very slowly," Era Postovni sporitelna analyst Jan Bures described the situation.

Moreover, these two factors came at a time when prices of housing, food and transport grew relatively fast, CSOB analyst Petr Dufek added.

"The end of the economic recession, which we expect already this year, could bring an improvement to the financial situation of households but it will take time," he forecast.

Solus has 39 members, among them 17 non-banking financial institutions, 12 banks, three building societies, four telecommunication operators, two energy companies and one wholesale chain.

By putting a question in the database, the members can learn about the existence of debts of their clients, potentially about their payment. The data are kept in the register for three years. They are gathered in the database only if the client agrees. Solus was set up in the summer of 1999.

Share of debt defaulters at end-Dec (pct):

Jihocesky 7.59
Jihomoravsky 6.64
Karlovarsky 13.57
Kralovehradecky 7.57
Liberecky 10.97
Moravskoslezsky 9.79
Olomoucky 7.47
Pardubicky 6.74
Plzensky 8.27
Praha 6.72
Stredocesky 7.93
Ustecky 14.65
Vysocina 5.40
Zlinsky 5.48
CzechRep 8.05

Source: Solus