41% credit card payments defaulted, Rs. 643 billion loans obtained pawning Gold in last 6 months in SL
Credit card and gold-pawning debts have drastically increased over the last six months as a result of the coronavirus pandemic.
The Central Bank of Sri Lanka (CBSL) said that loans obtained by the public by pawning gold jewelry at commercial banks and financial institutions has accumulated to over Rs. 643 billion over the past six months.
Official data reveals that many of the public are from lower or middle income families, and urban and rural poor households in the country.
The main reason to pawn gold jewelry has been identified as the price of gold, which is currently between Rs. 57,000 – 60,000 per sovereign.
The CBSL also states that one in four Sri Lankan credit card holder is grappling with the repayment of the credit card debt during this period.
Official data reports 41% or around Rs. 15.7 billion payments of the total credit card transactions (value) of Rs. 38.3 billion executed during the second quarter of 2020 has been defaulted.
The income sources of 64% households have been affected, while 7% have completely lost their incomes, prompting nearly 45% of households to seek financial support for loan repayment, redeeming mortgaged items, paying outstanding credit card balances, and other bill payments.
The current debt moratorium introduced by the CBSL for three months has also lapsed resulting in the liabilities to accumulate pushing both the lender and borrower into a crisis.
Credit card and gold-pawning debts have drastically increased over the last six months as a result of the coronavirus pandemic.
The Central Bank of Sri Lanka (CBSL) said that loans obtained by the public by pawning gold jewelry at commercial banks and financial institutions has accumulated to over Rs. 643 billion over the past six months.
Official data reveals that many of the public are from lower or middle income families, and urban and rural poor households in the country.
The main reason to pawn gold jewelry has been identified as the price of gold, which is currently between Rs. 57,000 – 60,000 per sovereign.
The CBSL also states that one in four Sri Lankan credit card holder is grappling with the repayment of the credit card debt during this period.
Official data reports 41% or around Rs. 15.7 billion payments of the total credit card transactions (value) of Rs. 38.3 billion executed during the second quarter of 2020 has been defaulted.
The income sources of 64% households have been affected, while 7% have completely lost their incomes, prompting nearly 45% of households to seek financial support for loan repayment, redeeming mortgaged items, paying outstanding credit card balances, and other bill payments.
The current debt moratorium introduced by the CBSL for three months has also lapsed resulting in the liabilities to accumulate pushing both the lender and borrower into a crisis.
