Mallorca economy: 29% of people are needing a loan

Inflation has compounded the problems caused by Covid. | Archive

Andrew EdePalma14/08/2022 08:27

A study by the Asufin association of financial users indicates that requests for loans in the Balearics have almost doubled over the past two years. A survey conducted in June found that 29.1% of people intended to apply for a loan. The main reasons were the need for money (26.7%) and debt refinancing (15.9%).

The hardships caused by the pandemic led to a 10% increase in requests in 2021. There is now inflation, and this has resulted in a further increase of 5.6%. The Asufin report concludes that "the risk is evident". "Inflation is suffocating many families who cannot make ends meet, and the need to obtain money for financing is therefore greater."

Luis Gallardo Sánchez-Toledo, the author of the report, says that the level of requests for loans in the Balearics is roughly in line with the national average. "The most significant change was in 2021, when there was a lot of need due to Covid. A certain normality has now returned, but inflation is causing many people to try to balance their accounts with loans."

However, obtaining loans is not straightforward. Gallardo adds that at a time of need, banks are not offering cheaper products with greater coverage; they have in fact gone in the opposite direction. "Certain profiles may end up being financially excluded, and so there is the paradox of loans only being given to those who don't need them."