RIGA - Consumer payment discipline improved in Latvia over the past year, yet 34 percent of Latvians failed to pay their bills on time in the past 12 months, according to the latest European Consumer Payment Report presented on Thursday by Intrum credit management company.
A year ago, 45 percent of the polled consumers in Latvia admitted to not paying their bills on time.
Across Europe, 24 percent of respondents said that they failed to pay their bills on time and that they had to borrow money to pay them off.
The European Consumer Payment report provides insights to European consumers’ views on their economic outlook, and is thus a barometer on the economic whereabouts of 24 European countries from the consumer’s perspective.
Germany, Austria and Sweden have taken the top three positions in this year's index, and Latvia has ranked 21st. In this year's survey, Latvia is only ahead of Poland, Lithuania and Greece.
Latvians have reported especially poor ability to pay their bills on time and save up for the future and have shown a low level of financial literacy.
Ilva Valeika, Managing Director at Intrum Baltics, said that nearly 45 percent of respondents in Europe said that their bills have been growing at a faster rate than their income. In Latvia such an opinion was voiced by 56 percent of respondents, as compared to 63 percent in France and 61 percent in Greece.
In Latvia, around 30 percent of respondents said they had had to borrow money to pay their bills, Valeika said, adding that typically people borrow from their family members or friends.
The number of consumers borrowing from non-bank lenders has already increased. The survey also reveals that people prefer to take loans not from their bank but from a different bank.
According to the survey, 75 percent of consumers in Europe manage to save up some money each month, Valeika said.
In Latvia, 35 percent of respondents said they do not put aside any savings, and most of the respondents who said they were saving money were dissatisfied with the monthly amount they manage to save. At the same time, 63 percent of respondents admitted being worried about their financial prospects for old age.
Valeika said that the share of Latvians not saving up money was one of the worst in Europe.
While 69 percent of respondents in Europe consider themselves financially educated, 40 percent answered questions of the survey incorrectly.
In Latvia, too, more than 60 percent of respondents claimed they new how to handle money, citing school, the internet, parents and banks as their sources of financial education.