Which Loans do We Take? A Micro-Level Analysis of Croatian Households’ Debt Participation

Published: 28/10/2020
Publication Working Papers
Issue W-61
Author Mate Rosan, Krunoslav Zauder
Date October 2020
JEL G51, D15, G21
ISSN 1334-0131


household debt, secured vs. unsecured debt, age profiles of borrowing, credit constraints, Household Finance and Consumption Survey

This paper uses a new data set in order to explore micro-level patterns of household borrowing in Croatia. By analyzing cross-section data from the Household Finance and Consumption Survey, conducted for the first time in Croatia in 2017, we present the structure of household debt holdings and identify several household characteristics associated with debt participation in three types of debt: secured debt, non-collateralized loans as well as overdrafts and/or credit card debt. Our results indicate that: a) households with middle aged heads tend to participate more and hold larger amounts of all three debt types, b) households with perceived credit constraints are more likely to take non-collateralized loans, and c) inability to finance consumption and willingness to take risks when making saving and investment decisions contribute to participation in overdrafts and/or credit card debt.