Banka Slovenije has compiled a review of the effectiveness of the binding macroprudential measures in the area of consumer lending that were introduced in 2019. The review shows that consumer lending has gradually increased since 2019 as a result of several factors. In addition to Banka Slovenije’s measures, the main factors affecting credit activities in recent years have been international and economic conditions, reflected among other things in the inflation and interest rate trends. We are again finding that consumer lending measures are particularly important precisely at times of uncertainty. In the last few years, the shares of non-performing exposures have remained low, which means that the majority of borrowers are repaying their liabilities to banks without disruption despite the large number of external shocks. Banka Slovenije has not seen any major infringements involving non-compliance with the measures.
In November 2019, in response to non-compliance with consumer lending recommendations, Banka Slovenije introduced a macroprudential measure to place limits on consumer lending. This measure was binding on banks, and also included a binding amount that had to remain with the consumer every month after they had repaid all their loan instalments under contract. We therefore set out binding minimum credit standards for housing and consumer loans, and provided a structural safeguard for sustainable borrowing by households at all phases of the financial cycle. The measure was designed to mitigate and prevent excessive credit growth and excessive leverage at households. We have regularly monitored the effects of the measure since it was introduced in November 2019, and made adjustments to it in 2022 and again in 2023.
We find that the nominal balance of household loans has increased since the measure was introduced, particularly in the last few years, but that year-on-year growth has also varied over that period. This is the result of a number of factors. In addition to the measures introduced, we believe that the main impact on credit activity has come from international and economic conditions, reflected among other things in uncertainty, inflation and interest rate trends.
After the pronounced fall in consumer lending volumes between 2020 and 2022, which was also due to the uncertainties connected with the pandemic, those volumes began to rise again in 2023. In addition to greater consumption and relatively favourable conditions on the labour market, changes in restrictions on borrowing and higher inflation have also contributed to a renewed rise that is seeing households, on average, borrowing more than in the past. Real growth, adjusted for inflation, was slightly lower, but still above the average for the euro area. Another important factor in the high growth rate has been the low base – that is, growth has been relatively high in the last two years because of the low volume of loans in the years preceding. In terms of volume, there were EUR 0.5 billion more consumer loans as at the end of April this year than at the end of 2019.
Year-on-year growth in housing loans gradually picked up until 2022, then began to fall in response to higher interest rates. With fluctuating interest rates, they have been growing again since 2023. In terms of volume, there were EUR 2.2 billion more housing loans as at the end of April 2025 than at the end of 2019.
Figure 1: Nominal and real balance of loans to households
Notes: The nominal balance of loans has been deflated by the consumer price index. The base year is January 2017.
Sources: PORFI, SORS.
The share of deviations remains within the permitted exemption share
The debt-service-to-income ratio (DSTI) remains at sustainable levels. Consumers have therefore spent an average of 27.7% of their income on consumer loan repayments over the last two years, while consumers have spent an average of 34% of their income on housing loan repayments. The share of deviations from the prescribed DSTI therefore remains within the permitted exemption share for both consumer and housing loans. Here we find that the share of non-performing loans is higher among loans that deviate from the macroprudential restrictions.
The average maturity of housing loans hovers around the 18-year mark, while the maturity of consumer loans has been at around 6.3 years over the last two years. The measure in place for consumer loans sets a limit of 84 months (seven years), and the share of deviations from the maximum maturity limit is within the permitted exemption share. In this case as well, loans that do not comply with the maturity restriction measure become non-performing more often.
With loans secured by residential real estate, the average ratio of the amount of a housing loan to the value of the real estate (loan-to-value, LTV) increased in 2024. The average LTV on loans for primary properties stood at approximately 67% in the final quarter of 2024, while the average LTV on loans for secondary properties stood at 58%. The recommended LTV is 80% for purchases of property that will serve as the consumer’s primary residence, and 70% for secondary properties. Towards the end of last year, the share of deviations from the recommended LTV also rose, mainly for loans for secondary properties.
Households continue to largely take out loans with banks and savings banks, with other (alternative) borrowing options being used less frequently.
Figure 2: Trends in all three main instruments: DSTI, LTV and maturity
Provision of loans outside the conditions of our measures
Banka Slovenije is noticing that, since the introduction of the measure, some banks have been offering products that enable loans to be obtained outside the conditions of our measures, thereby replacing consumer loans. These loans can represent an alternative to the usual consumer loans and bring similar risks. While the volume of these products is small, it has been on the increase over the last two years. We are monitoring this issue as appropriate.
Non-performing exposures remain low
Non-performing exposures from consumer and housing loans have remained low in the period being tracked. With consumer loans, the share is falling while the volume is rising. The share of non-performing exposures with these loans was 2.8% at the beginning of 2019, with a peak of 3.7% reached in 2021. Since then, the share has fallen, standing at 3.1% at the end of April 2025. With housing loans, both the share and volume of non-performing exposures have been falling in the last few years. The share of non-performing exposures was 2.3% at the beginning of 2019, but had fallen to 0.9% by the end of April 2025.
Banka Slovenije will carry out a reevaluation at the end of the year to establish whether the minimum consumer creditworthiness level remains appropriate and, if there are any changes in minimum living costs as calculated by the Ministry of Labour, Family, Social Affairs and Equal Opportunities, adjust it as required.