A kind of borrowing epidemic is unfolding in Serbia. Since 2008, the year of the global financial crisis, people in Serbia have taken out the most loans in dinars, with cash loans at the forefront.
Patching financial holes, loan upon loan, one credit to cover another - this is how life in Serbia looks this year.
According to the Statistical Office of the Republic of Serbia, the official average salary for May 2025 was 107,705 dinars. However, half the country's citizens actually earn less than 84,000 dinars, which is not enough to cover even basic food and essentials.
That is why they are turning to quick fixes. Thus, in the second quarter of this year, the largest quarterly growth of new dinar loans was recorded, largely due to cash loans - a level not seen since autumn 2008. At that time, citizens resorted to borrowing because of the dramatic global financial collapse - the global financial crisis.
According to the brokerage firm Momentum, in the last three months of 2024, cash loans worth 3.5 billion dinars were taken out in Serbia, while in April, May and June 2025, as much as 46.8 billion dinars' worth of cash loans were issued.
Nobody listened
Seventeen years later, the new rush for cash loans is the result of the policy of the National Bank of Serbia.
"Over-indebted citizens are dealing with the consequences because the NBS governor, by her decision, enabled banks to grant cash loans for longer than 12 months," explains Đorđe Đukić, professor of banking at the Faculty of Economics in Belgrade. "That period kept being extended until it reached five years, which is now the maximum term for a cash loan."
Such banking policy, Đukić adds, has led citizens into debt bondage, as they take out new loans to repay old ones.
In Serbia, cash loans are obtained very quickly; in many cases clients do not even have to go to the bank, nor are the criteria particularly strict for proving that the borrower will be able to repay the loan. However, interest rates are noticeably higher than in Western European countries.
Meanwhile, people have also grown poorer due to high inflation and soaring food prices. Although Đukić was one of the few who warned the NBS that it must limit the term for taking out cash loans, the governor, Jorgovanka Tabaković, now in her third mandate at the head of the institution, ignored these warnings.
"Once a state measure is missed and no preventive action is taken, the consequences are long-term," says the economics professor. "This gives us a situation unseen in other countries - that cash loans have become dominant in terms of total value, surpassing even housing loans."
Patching the holes in household budget
The rise in credit activity in dinars in the country, explains broker Nenad Gujaničić, is mainly linked to citizens' cash loans and liquidity loans for businesses.
"It should be the other way round - investment loans and housing loans should take the lead," Gujaničić told Vreme. "This can be an indicator of the purchasing power of the population. Although not everyone takes out loans just to survive, many Serbian citizens turn to cash loans when the household budget needs topping up."
Another indicator will be the new results for the third quarter of 2025, when data is available on citizens' borrowing during the holiday season or school preparations.
"If cash loans continue to grow, consumers will face a serious problem," Gujaničić added. "But the fact is that more than a million people in the country earn less than 80,000 dinars - and that excludes pensioners. With that amount, they cannot provide much for their families, which is why they resort to quick and expensive loans."
It won't be any different
Jorgovanka Tabaković, however, is continuing with similar measures this autumn.
As part of Aleksandar Vučić's September handouts for the people, a new cap on cash loan interest rates is being introduced. The National Bank of Serbia has ordered private banks to update their offers of consumer, cash and housing loans by 15 September 2025, so that people with regular monthly incomes of up to 100,000 dinars are offered loans under more favourable conditions.
Although it may seem that borrowers will be better off as they will pay lower interest, experts warn that banks always find a way to profit.
"Banks in Serbia recorded extremely high profits last year, a record value of 1.3 billion euros," warns Professor Đukić, adding that foreign banks in the country should not be blamed for finding ways to make money.
"This kind of policy never delivers results, as shown by comparative policies in countries where similar measures have already been tried," the professor of economics adds.