Bosnian citizens are over-indebted and do not understand the contracts they sign

In the first three months of 2014, Bosnian citizens sought advice or assistance from the association for responsible personal finance management "U plusu" 207 times, Tarik Limo, the association's director, told NAP. Last year, they had 932 inquiries for advice or assistance.

- These are mostly problems arising from guarantees, from misunderstanding contractual provisions, financial terms, and characteristics of financial products that citizens encounter. They needed advice and expert assistance on ways and possibilities of reaching an agreement on amicable repayment when they have problems with repayment, and on ways and possibilities of restructuring claims - state the association.

Another problem citizens face are the contracts they sign with banks, which they did not read with sufficient understanding before signing or did not understand certain terms, writes Patria.

- We were faced with subsequent inquiries regarding the type of interest rate, collateral instruments for claims, ways and possibilities of terminating loan agreements, etc. On every occasion, we advise citizens to get informed or seek advice if they do not understand any provision of the contract - say the association "U plusu".

The socio-economic situation of Bosnian citizens often leaves no other option but to take out loans. Economic analyses show that each Bosnian citizen owes banks about 1,700 KM on average.

- From the experience of citizens who have contacted us, over-indebtedness is a pronounced problem they face, which significantly burdens their daily lives and goes beyond the purely economic component, affecting family relationships and the overall social functionality of an individual. The inability to service obligations usually drives citizens to further borrowing, which ultimately results in an escalation of the problem. We strive to provide advisory assistance to citizens in assessing the problem, and to create a remediation plan for the problem, and it is very important that the person admits the problem and shows responsibility and discipline in attempting to resolve it - emphasize "U plusu".

It is very important for citizens to understand the seriousness of the situation they are in, both before signing a loan agreement and afterwards when problems with payment or over-indebtedness arise.

- Our goal is to make it easier for citizens to cope with difficulties if they have fallen into them, or to act preventively through counseling and education to raise awareness of the importance of financial literacy, i.e., more responsible personal finance management - conclude the association.