Even though the crisis related to the Covid-19 pandemic affected the income and financial situation of Czechs, the majority didn't fall into debt because of it. Debt due to the coronavirus crisis only affected a tenth of the economically active population in the Czech Republic. The most common reasons were everyday living expenses and consumption, with a quarter of cases involving health-related expenses. These health-related costs were also the most frequent expenditure for Czechs in general during the pandemic, with 40% of them spending on health. The second most common expense was consumer electronics, purchased by a third of Czechs despite the crisis. These findings come from a survey by the EOS Group, which examined the impact of the coronavirus crisis on the financial situation of residents in the Czech Republic and selected European countries.
The debt crisis in the Czech Republic is currently being postponed. Despite the pandemic, debts were avoided by four-fifths of Czechs. Only 13% of them incurred debt due to the crisis, mostly amounts ranging up to 26 (42%) or 65 thousand (28%) Czech crowns. "Although some Czechs got into debt during the crisis, in two-thirds of cases, it involved relatively low amounts. The coronavirus did not significantly impact the financial situation of most Czech households to the extent of necessitating a loan. Restrictions on certain expenditures and more cautious money management may have played a role. Nevertheless, the low debt levels resulting from the crisis are good news in terms of the financial responsibility of Czechs," evaluated the situation Vladimir Vachel, CEO of the EOS KSI debt collection agency. If Czechs were compelled to borrow due to the coronavirus crisis, it was most commonly to cover everyday expenses and consumption, reported by 60% of respondents. A third had to borrow money for rent or housing-related costs.
Some Czechs lacked finances for healthcare. Health expenses dominated during the coronavirus crisis, with two-fifths of Czechs spending the most on it, and it was the reason for debt for 25% of those who borrowed because of the crisis. The 50+ age group significantly spent more on healthcare, with every second person incurring these costs. People in partnerships and families with children also spent more on healthcare, with over two-fifths of them doing so during the pandemic. "Since the coronavirus situation particularly endangered people's health, increased spending in this segment makes sense. However, it's certainly a warning sign that a portion of the population got into debt because of it, despite the situation possibly being caused by income losses and subsequent difficulties in paying regular health-related expenses such as purchasing medications or rehabilitation," Vachel remarked.
Czechs spent on electronics even during the crisis. Health wasn't the only significant expense; nearly a quarter of Czechs bought new household appliances during the crisis. Families with children were the main buyers, with a third of them acquiring household appliances. However, Czechs purchased consumer electronics even more frequently during the crisis, with 33% obtaining such items during the pandemic. Men significantly spent more on consumer electronics, as reported by two-fifths of respondents, while only a quarter of women did. Those in partnerships and families with children also bought consumer electronics more frequently. Almost a quarter of Czechs had expenses related to purchasing furniture or other household equipment, with men and families with children making these purchases more frequently. Czech households improved not only in terms of equipment but also underwent smaller renovations. A quarter of economically active Czechs spent on renovations, with families with children being the most involved, while singles devoted the least time to such activities.
About the Survey: Covid-19 Financial Report
The survey was conducted in collaboration with the agency Dynata. In the Czech Republic, data collection took place among 1040 respondents in April 2021, in Germany and Croatia in January 2021, involving 2000 and 1000 respondents respectively. Participants answered questions about the pandemic's impact, focusing on the financial situation of Czechs and how it changed during the crisis. The survey explored how the crisis affected their behavior and consumption patterns, to what extent and for what reasons consumers incurred debt, and how they were able to repay debts.
EOS KSI Czech Republic, s.r.o., is part of a multinational network of 50 companies operating in more than 25 countries, specializing in financial services and all aspects of debt collection. The EOS Group was founded in 1974 and is known for its high-level services. Notable clients include banks, insurance companies, leasing companies, consumer credit providers, telecommunications companies, wholesalers, and retailers. The group's headquarters are in Hamburg, Germany. Besides Germany, the EOS Group has direct representation in Belgium, Bosnia and Herzegovina, Bulgaria, Montenegro, the Czech Republic, Denmark, France, Croatia, Ireland, Canada, Hungary, Macedonia, Poland, Austria, Romania, Russia, Greece, Slovakia, Slovenia, the United States, Serbia, Spain, Switzerland, and the United Kingdom. Indirectly, it is present in another 150 countries worldwide.