The National Bank of Serbia is preparing measures to reduce bank margins, primarily aimed at helping low-income groups, says financial consultant Vladimir Vasić. He emphasizes the need to strengthen competition among banks.
Vasić explains that Serbia’s banking market is heavily bank-centric, with about 90-92% of circulating money held in banks. Due to limited alternative investment options, demand for bank credit is high, allowing banks to set higher prices (interest rates). This lack of competition drives up borrowing costs.
He notes that the upcoming measures by the National Bank could be administrative but stresses the importance of long-term efforts to improve loan options and increase competition in the financial sector.
Regarding borrowing habits, Vasić warns that taking loans just to cover expenses traps people in a cycle of debt, where the borrowed money doesn’t create value but only pays off previous debts.
He advises that loans should be used to invest in personal growth or income-generating activities—like learning new skills or further education—which increase future earning potential.
Vasić also recommends that borrowers with lower incomes should not allocate more than 30% of their salary to loan repayments, to avoid financial strain, while those with higher incomes may manage multiple loans more easily.
In summary, he underscores that successful loan repayment depends on one’s ability to generate income and stresses responsible borrowing aligned with clear financial goals.
