A Current Assessment of Household Indebtedness in Turkey and the Possible Consequences of Household Indebtedness

Abstract

Household indebtedness, which has been increasing all over the world, has tended to increase in Turkey, especially after the 2000s, in line with the processes of neoliberalism, globalization, and financialization. The fact that the ratio of people who have installment payments or debts other than housing purchases and housing costs in Turkey with the 2021 data, reached almost two-thirds of the country's population, indicates an indebted society. It is important to examine the details of household indebtedness through the literature. Because the comparisons made only depending on numbers cover the unique socio-economic conditions of the countries. Thus this study aims to examine household indebtedness in Turkey through current secondary data and literature review, identify the major issues/gaps in the literature, and emphasize the possible consequences of indebtedness. According to the results of the national literature review, it is seen that the most discussed issues are related to the assessments at the level of socio-economic classes. However, it has been determined that there is a significant gap in the indebtedness of disadvantaged groups and the negative consequences of household indebtedness. Thus, the possible consequences of household indebtedness, which may be valid, especially for individuals in the middle and low-income groups, including the working class, are supported by an international literature review. The fact that the consequences of household indebtedness are not only limited to the economic area but also affect the lives of debtors, and the social structure, requires an increased interest of social politicians on the subject.