Households continue to suffer from the pandemic crisis

Updated Monday, June 28, 2021 –

The health hecatomb seems to be coming to an end. This can be concluded from the positive trend in the data associated with deaths from the virus, the decrease in the number of infections, the incidence rate, the occupation of ICUs and the consequent relief of certain social restrictions. However, Spain is far from leaving behind the deep economic crisis that the Covid-19 has caused. Certainly, the situation prior to the pandemic was favorable, already approaching levels of well-being almost prior to the crash of 2008, but everything that took so long to work was ruined in a matter of months.

Households continue to suffer from the impact of the virus. Thousands of families have been left out in the open or in ERTE limbo and, without sufficient income to meet their needs, they seek outlets, even if they involve risks. For example, the information that we publish today: the very high growth of microcredits -fast loans and ultra-fast loans- granted by certain financial companies without taking into account the solvency situation of the applicant and that have associated a short repayment term and very high interest , among other handicaps. The immediate consequence is the propagation of a spiral of indebtedness quite dangerous.

The study that we echo offers a very worrying specific data, and that is that the percentage of loans with risk of default have increased in Spain by 58% after the end of the state of alarm. The banking entities handle this information and for this reason they have not only restricted the credit tap, but have also tightened the conditions for granting loans. Fear of delinquency on the banks it is huge. It must not be hidden that for years they have been immersed in a process of transformation and restructuring whose most visible effect is the closure of branches and the dismissal of workers. Similarly, it should be noted that this reluctance of the entities when it comes to giving loans to families is one of the causes that has pushed them to take advantage of the higher risk financing offered by other companies.

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The situation is complex. The recovery is expected to be great. It is unknown if it will be durable. But while many households suffer real economic hardships. And where the Social helps that the Government and its speakers were announced with great fanfare and despair.

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