Unpaid letters pile up in the office of Ali Golpinar, “Muhtar” (district mayor) in suburban Ankara (AFP / Adem ALTAN)
Ali Golpinar no longer knows what to do with the dozens of letters that are sent to his constituents every day and which, if they are not delivered, end up in his office as “Muhtar”, district mayor in a suburb of the Turkish capital Ankara.
Notifications of unpaid bills, reminders, or court summonses: The number of these letters, a large portion of which are collection letters, has doubled in two years to about 40 a day in this modest borough of nearly 25,000 people.
“These are just undelivered letters. Imagine the total number. People can no longer pay their debts,” says the Muhtar.
According to the Turkish press, 24 million reparation files were before the country’s courts in August.
The amount of unpaid loans from individuals rose from 17 to 29 billion Turkish liras ($1.55 billion) between March and September, according to the Turkish Banking Regulatory Authority.
– credit race –
The increase in debt is one of the consequences of the very high inflation hitting Turkey with more than 84% in one year.
More than 40 percent of those in work have to make do with the minimum wage, which will be raised from $300 to $450 on January 1.
But as rents rise (+163% over a year in Ankara, +144% in Istanbul), housing costs will continue to eat up almost all low wages, says Hacer Foggo, the CHP’s anti-poverty director. the main Turkish opposition party.
In this context, an old practice has prevailed again: shopping on credit in neighborhood shops.
“Requesting a bank loan is risky. But the local grocer knows you, they won’t turn you down,” analyzes Mr Golpinar.
Grocers are seeing more and more customers asking them to pay on credit (AFP/Adem ALTAN)
Based on trust, with no signing of documents or interest, these purchases on credit are the last resort for some heavily indebted families.
“More and more customers are demanding payment on credit,” confirms Yuksel Kurt, a grocer in the Keçioren district of Ankara’s northern suburbs.
“Some I have to turn down because I know I will never be repaid. If a debt isn’t paid after six months, we know we have to forget it,” he says, showing the torn pages of his notebook in which he notes the debt.
Bread, biscuits, oil… Purchases on credit are often for bare necessities but add to already long lists of debt.
“Many pay off their debts by taking out loans elsewhere,” says Mr. Kurt.
Embarrassed, a young woman who came in to buy cigarettes on credit refuses to speak.
At the neighboring bakery, Cemal Aygun reminds us that shopkeepers are often indebted.
“I owe my flour supplier 10,000 Turkish lire ($535) (…) Every month I ask friends for help,” he says.
– “Dilemmas” –
The Turkish government promoted this debt spiral until 2021, says economist Erinç Yeldan.
Access to credit eased to boost Turkey’s growth, economists say (AFP/Yasin AKGUL)
“Access to bank credit has been made easier (…) to encourage virtual growth,” he explains.
As a result, people without a permanent job or insufficient income would have received loans that they are now not repaying, says Hacer Foggo.
“They face a dilemma: pay the rent, take the child to the doctor or repay the loan,” she complains.
In Turkish opposition city halls such as Istanbul and Ankara, a website allows you to pay the water and gas bills of those most in need.
But no organization is specifically responsible for over-indebtedness.
“There are concrete actions that are reduced to charitable causes without this being institutionalised,” regrets Mr. Yeldan.
Government aid for the poorest exists but is insufficient, Judge Foggo.
However, with the approach of the presidential and parliamentary elections in June 2023, the government is multiplying the initiatives.
In early November, President Recep Tayyip Erdogan announced debt relief of less than 2,000 Turkish lira ($105) if the creditor agrees.
However, Mr. Golpinar remains skeptical: “I don’t know anyone who could benefit from it,” he says.