Excessive Debt of Households and Financial Exclusion
Excessive Debt of Households and Financial Exclusion

Author(s): Ewa Gubernat
Subject(s): Micro-Economics, Socio-Economic Research
Published by: Masarykova univerzita nakladatelství
Keywords: household debts; financial exclusion; overindebtedness;
Summary/Abstract: The issue of financial exclusion and excessive indebtedness is increasingly the subject of actions taken at the national level. The growing interest in overindebtedness problem is a response to the observed systematic increase in household indebtedness, which in a situation of economic slowdown may lead to lower income of households and threaten timely settlement of liabilities incurred. Awareness of the scale of financial exclusion and excessive indebtedness and the negative consequences of what they involve on a micro-economic scale for households and as well for on a macro-economic for the whole economy, is not reflected in considerations on the basis of identification of interdependencies and concomitance of both phenomena. Currently, there are no studies which, based on the identification of determinants of both phenomena, would indicate the existence of a relationship between them. The aim of the article is to indicate the relationships that occur between the phenomenon of excessive indebtedness and financial exclusion, especially banking. For its implementation, it will be necessary to outline the size of household debt and financial exclusion in Poland, and then to identify the causes and effects of both phenomena, with an indication of the relationship between them. The author accepted the hypothesis that the emergence of debt is the effect of incurring liabilities of households as a natural stage of its development. Loans improve the quality of life and provide better access to the necessary goods and services. By contrast, over-indebtedness means a deterioration in the financial situation that leads to financial exclusion. The analysis of aggregated financial data was used to verify hypotheses.

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