Following the completion of public consultations, the Croatian National Bank adopted the Decision on consumer lending criteria, announced in January 2025. With a view to preserving the stability of the financial system, the measures are introduced to mitigate the accumulation of risks associated with strong lending to households and to strengthen the financial resilience of households in possible unfavourable macroeconomic scenarios. The measures are preventative and are expected to primarily affect general-purpose cash loans, while their effect on housing lending should currently be less significant. In current macroeconomic conditions characterised by a rapid increase in household consumption, these measures also contribute to the reduction of inflationary pressures associated with increased demand.
Taking into account the comments received during public consultations, consumer lending criteria restrictions will enter into force on 1 July 2025 to allow the part of consumers who are already in the process of creditworthiness assessment and real estate purchase to complete the conclusion of agreements before new measures begin to apply. At the same time, entities subject to the application of the Decision are given enough time to adjust their internal systems and thus establish a high-quality database to implement and oversee the application of measures. The Decision has been adjusted to take into consideration a large number of comments regarding the operationalisation of measures[1].
The basic elements of measures remain the same as in the draft decision submitted for public consultations. The amount of new consumer debt is limited so that, when a new loan is granted:
- the ratio of monthly total debt service to income (debt service to income, DSTI) may not exceed 45% for housing loans and 40% for non-housing loans;
- the ratio of the amount of consumer loan to the value of pledged immovable property (loan to value, LTV) may not exceed 90%.
In addition, the maturity of housing loans and non-housing loans to consumers collateralised by immovable property is limited to thirty, while the maturity of other non-housing loans is limited to ten years. The measures provide for exemptions, so that banks will still be allowed to grant 20% of the amount of consumer housing loans and 10% of the amount of other loans to consumers beyond the aforementioned DSTI limits, as well as 20% of loans to consumers beyond the LTV limits, based on their own assessment. When granting housing loans, exemptions may primarily be applied to consumers addressing their housing needs by the loan, with the aim of mitigating a possible unfavourable effect on consumers who are purchasing their first home or a home that more adequately meets their family needs.
The restriction of lending criteria constitutes a permanent structural element of the CNB’s macroprudential policy. The CNB continues to monitor the effect of the entire set of macroprudential measures and their contribution to the preservation of the stability of the financial system and long-term sustainable economic growth, protecting consumer interests, and will, where necessary, adjust the measures to the development of systemic risks and overall macrofinancial circumstances.
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For more details, see the statement on comments and suggestions submitted in the course of public consultations on the draft Decision on consumer lending criteria. ↑