Turkish families borrowing at a level more than half of their assets

An aerial view of Istanbul is seen in this photo. Housing credit has made up one-third of all family loans in the total of individual loans since 2005.

There is a culture of household borrowing that was of unseen and unheard dimensions before 2003. Banks give a third of their credit to individuals Turkey, with its state, corporations and individuals, has rapidly learned how to borrow in recent years - something it had previously been avoiding as a culture.

Several sayings have been passed on to us from our forefathers in our traditional culture advising us to avoid taking loans. It is believed that the most important factor that caused the collapse of the mighty Ottoman Empire was the level of state borrowing. When the international need to borrow occurred in the mid-19th century, it was initially believed that borrowing from a Muslim country would be better than borrowing from a non-Muslim country; thus, borrowing from the King of Morocco was first considered, before being given up.

Because it was a widespread belief that borrowing from broker’s in Istanbul’s Pera neighborhood by Europe’s rising imperialist states had accelerated the collapse of the Ottomans, the founders of the Republic always preferred a policy of self-sufficiency, rather than borrowing from abroad. This actually meant heavy taxes on farmers.

Until 1980, Turkey sustained its relationship with global capitalism in a rather introverted style; Turkey’s lenders were institutions such as the World Bank, the IMF and the European Investment Bank.

Long-term, soft loans were taken from them in the form of credit for projects given mostly to the state. After 1980, the door to integrating with the world economy was opened, and in the 1990s and 2000s this door became further ajar, also encouraging the private sector - along with the public sector - to borrow...

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