No country is the same when it comes to money lending habits and social acceptance of it. Global financial habits vary depending not only on the country’s economic situation, but also on the culture, overall financial wisdom and many other variables. Each country has its own way to go about money lending in terms of where to borrow the money from, what to spend it on, the amount of cash borrowed… Let’s take a look at how the global financial habits shape up.
Around two in five people around the world take out a loan each year. The number one country in the world to take a loan is South Africa with around 86% of the population owing money. There is a division in lending habits in Europe – the countries in Southern and Eastern Europe are less likely to take out a loan in comparison to the Northern part of the continent.
The UK is amongst the top European borrowing countries, especially when it comes to credit cards – around 70% of EU credit cards are in hands of British consumers. The British habits of spending (just like the American ones) are characterized by ‘buy now, pay later’ philosophy, which explains the high amount of credit cards debt.
Around 15.2 million adult Poles currently have a loan. Most often this case concerns people of working age. Liabilities to banks have as much as 58% of Poles aged 32-46. The vast majority (54%) of all people taking out loans are to get a mortgage loan.
When it comes to Sweden, borrowing money (or lånapengar in Swedish) is very popular and socially acceptable. Mortgage loans are particularly common because of their attractive conditions, such as the ability to freely shape the loan’s repayment period. Mortgages represent 95% of the total debt of the Swedes, and they are 3.7 times higher than the annual income of their owners.
There are serious concerns that the Swedes are increasing their debt, which they will not pay anyway, and the central bank of Sweden in 2014 stated that most Swedes would most probably not be able to repay the loans during their lifetime. In order to stabilize the country’s economic situation and counteract the housing bubble, they are trying to set new rules and regulations for granting mortgage loans.
The source from which money is borrowed varies globally. In fact, there are 31 countries across the globe in which less than 1% of population would borrow money from a bank. This is a case mostly in the developing countries. Borrowing money from family turns out to be the most popular choice amongst residents of Latin America, south-east Asia and north America.
There is an interesting trend in Vietnam, where 38% of adults would turn to their employer in case of needing an emergency loan. There are 17 countries where 1 in 5 people would approach their employer in such a situation.
A rough division into northern and southern hemisphere shows up when talking about where the borrowed money goes. Countries in northern hemisphere are more likely to take out mortgage loans, where as countries around South America, Africa and south-east Asia take out loans to cover basic needs such as education and healthcare.