Sources of Financing of Household Debt in Poland

Research background: This paper analyses the inter-relationships between the sources of financing households’ and the debt burden of indebted households.

Purpose: The aim of the paper is to find out inter-relationships between the sources of financing debt and its burden among indebted households.

Research Methodology: The research is divided into two parts. The first represents household debt in Poland in comparison to Euro area countries on the basis of the Households Finance and Consumption Survey. The second analyses are the data collected by the questionnaire at the beginning of 2018 in the Lubelskie voivodeship using the Tau b Kendall coefficient.

Results: The analysis shows that households in the Lubelskie voivodeship focus their debt on financing their housing and consumption needs, whereby the main source of obtaining credit is commercial banks. However, there is a real risk observed in the concentration of loans in parabanks in general and in the need to use low private loans.

Novelty: The findings show that the picture of household debt requires a thorough analysis in different contexts, as from an initial examination the situation looks relatively good, but when analysing more deeply and dividing households into separate groups with similar characteristics, we find considerable varied problems influencing households’ financial situations and raising the risk following their indebtedness.