The invisible face of the economic crisis: Overdraft accounts, cash advances, KMH... The number has risen to 29 million

Citizens crushed under the weight of high inflation are now turning to (KMH) overdraft accounts to cover payments and improve their living conditions. 

With the regulation introduced in March, the interest rate for credit card cash advances was increased from 4.42 percent to 5 percent, and the KMH interest rate also became 5 percent.

The late payment interest rate is applied at a level of 5.30 percent. When the Banking and Insurance Transaction Tax (BSMV) and the Resource Utilization Support Fund (KKDF) are added to these, the interest rate increases even further.

AVERAGE DEBT 8,346 TL

According to a report in BirGün; for someone who withdraws 5,000 TL from a KMH, the amount that must be repaid after a 7-day usage period, with the addition of KKDF and BSMV, becomes 5,075.83 TL. While the interest amount appears low for weekly usage, it creates a significant difference in monthly usage. For a 30-day usage period of 5,000 TL, the KKDF and BSMV amount reaches 75 TL, and the interest amount reaches 250 TL. At the end of 30 days, a repayment of 5,325 TL is made.

Despite this picture, KMH usage is constantly increasing. Moreover, the usage amounts are small, just like with credit cards. According to the data, KMH debts have increased by 122.19 percent in the last year. The number of users has reached 29.2 million. According to BRSA data, the debt amount, which was 117.3 billion TL in June 2023 when interest rate hikes began, has surged by 122.9 percent to 260.7 billion TL.

29 MILLION PEOPLE ARE USING IT

According to Risk Center data, as of April 2024, 29.2 million people are using overdraft accounts. The number of people using KMH has increased by one and a half million in one year. The average debt amount per user has increased by nearly twofold compared to the same month last year, rising to 8,346 TL.

News Source: 12punto