Household borrowing in Montenegro reached €2.5 billion, increasing by nearly 18% year on year, according to data from the Central Bank of Montenegro. The outstanding amount is approximately €390 million higher than during the same period last year. The increase comes despite average monthly wages exceeding €1,000, with many households continuing to rely on bank borrowing to meet everyday expenses and unexpected financial needs.
Consumer and cash loans make up almost half of total household borrowing, while housing loans account for a smaller portion of outstanding debt. The structure of borrowing shows that a significant share of household credit is being used for current financial obligations rather than property purchases or longer-term investment. Economic analyst Mirza Mulešković said higher minimum wages had increased households’ borrowing capacity and contributed to stronger demand for loans. He also pointed to borrowing for daily expenses as an indication of weaknesses in household finances.
Mulešković said Montenegro needs to diversify its economy, increase investment in more productive sectors and create conditions that would support higher levels of household savings and investment. Until these changes take place, household reliance on credit is expected to remain a feature of financial life for many citizens.
