Unpaid loans sent to debt collectors jump 68 percent in Turkey in a year

The amount of unpaid loans being handled by Turkey’s debt collection companies rose 68 percent in a year to 132 billion lira, a sign that more people are falling behind on bank loans as borrowing costs remain high, the BirGün daily reported, citing the Turkish Central Bank.

The increase reflects a shift of unpaid loans from bank balance sheets to asset management companies, which buy nonperforming loan portfolios at a discount and seek to collect them from borrowers.

According to the central bank report, receivables at asset management companies stood at 79 billion lira ($1.7 billion) in March 2025, rose to 101 billion lira ($2.2 billion) in September 2025 and reached 132 billion lira in March 2026.

BirGün said the total was around 39 billion lira ($855 million) in June 2023, when Treasury and Finance Minister Mehmet Şimşek returned to office after President Recep Tayyip Erdoğan’s re-election and Turkey shifted toward tighter monetary policy. By March 2026 the amount had risen to roughly 3.5 times that level.

The rise comes as the central bank has introduced new restrictions on consumer credit growth in an effort to support tight monetary policy and macrofinancial stability.

In a May 23 announcement, the bank lowered eight-week growth limits for general purpose consumer loans and vehicle loans to 3 percent from 4 percent, cut the growth limit for consumer overdraft accounts to 1 percent from 2 percent and reduced Turkish lira loan growth limits for small and medium-sized enterprises and larger companies.

The move tightened rules introduced in January, when the central bank set a 2 percent eight-week growth limit for consumer overdraft account limits and lowered the foreign currency loan growth limit to 0.5 percent from 1 percent.

The central bank said in its Financial Stability Report that tight financial conditions continued to support the rebalancing of domestic demand and the disinflation process. It also said unsecured retail loan growth had slowed and that additional macroprudential measures had slowed the growth of personal credit cards and overdraft accounts.

The report’s data on household borrowing are mixed. The central bank said household financial debt was 10.1 percent of gross domestic product in the first quarter of 2026, still well below peer country levels and Turkey’s long term average. But it also said the ratio had risen moderately since 2025, with unsecured consumer loans contributing to the increase.

Nominal consumer debt continued to grow. General purpose consumer loans reached 2.52 trillion lira ($55.2 billion) in March 2026, up 53.7 percent from a year earlier. Overdraft accounts reached 898 billion lira ($19.7 billion), up 67.2 percent, while personal credit card balances reached 3.18 trillion lira ($69.8 billion), up 53.6 percent.

Banks sell nonperforming loan portfolios to asset management companies to remove troubled loans from their balance sheets and outsource collection. For borrowers, that means the creditor becomes an asset management company rather than the original bank.

Gelecek Varlık Yönetimi, one of Turkey’s listed asset management companies, describes itself as a financial institution that buys nonperforming loan portfolios from banks and other financial institutions and works in debt resolution services.

New portfolio sales show that individual debt is driving much of the sector’s growth. Gelecek Varlık’s first quarter 2026 investor presentation listed 17 billion lira ($373 million) in sector principal sales in the first three months of the year. The company said 93 percent of that volume came from individual debts, while small and medium-sized enterprises and commercial loans accounted for 7 percent.

The same presentation projected that total principal sales to asset management companies could reach 90 billion to 100 billion lira ($2 billion to $2.2 billion) in 2026, with 75 percent to 80 percent expected to come from individual debts.

The number of people whose loans are now being collected by asset management companies has also grown. BirGün, citing Risk Center data from the Turkish Bank Association, said 2.26 million people had debts under followup by such companies as of March.

The central bank framed the picture with more caution than the nominal increases alone suggest. The bank said macroprudential rules had helped stabilize household leverage and slow balance and limit growth in personal credit cards and overdraft accounts.

Still, the rise in receivables at asset management companies and the high share of individual debt in new portfolio sales suggest that unpaid household debt is moving further into the nonbank collection sector. The latest credit curbs are intended to slow new consumer borrowing, but the data show stress in existing household debt is still building.