Total lending to households in September grew both on the month and on the year, show data from the Croatian National Bank (HNB).

Household loans, which account for 50% of all loans, grew by 0.3% from August, totalling HRK 135.6 billion at the end of September.

Compared to September 2019, household loans grew by 4.2%.

The annual growth of household loans has been present since mid-2017.

Broken down by type of loan, more than 44% of loans were housing loans, totalling HRK 60.4 billion, 9.5% more than in September 2019. The growth of housing loans has been present since November 2017. On the month, they grew by 0.4%.

Due to higher credit activity as well as government-subsidised housing construction, the share of housing loans in total household loans grew from 42.4 to 44.6% over a period of one year while the share of kuna housing loans in total loans grew from 29.9 to 31.4%, Raiffeisenbank (RBA) analysts said.

On the other hand, the growth of general-purpose cash loans has slowed down markedly and they account for 39% of total loans. Before the crisis caused by the coronavirus crisis, they grew at two-digit rates.

The year-on-year increase in lending to households was also owing to an annual increase in mortgage loans.

The currency structure of the loans shows a greater inclination to borrowing in the domestic currency, which is also due to low interest rates.