Proceedings of The 2nd International Conference on Advanced Research in Management, Business, and Finance
Performance Analysis of the Consumer Loans: A Regional Study in Turkey
Metin Allahverdi and Ali Alagöz
Turkey, which has been struggling with high levels of inflation for many years, has started to receive the results of this struggle in recent years, but inflation has not yet reduced to the level of developing countries due to fluctuations in the global economy. The fact that income did not rise at the same rate in the face of rising consumer prices caused the citizens in the country to borrow to meet their needs (Consumer loans, which were approximately TL 173 billion in 2010, increased to TL 550 billion as of July 2019). On the other hand, the rise in consumer prices and the lack of income in the level of prices have started to cause a decrease in the ability to pay debts (As of July 2019, non-performing loans, which were approximately TL 20 billion in 2010, has increased to approximately TL 90 billion).This study aims to examine the consumer loans performance (share of non-performing loans in total cash loans) of the banking sector in Turkey regionally under the shadow of inflation. For this purpose, firstly this study, the regions in Turkey (statistical regions – level 2) were clustered according to consumer price increases between 2016: Q1 – 2019: Q2 periods. Then, the consumer loans performances of the banking sector belonging to the regions in these clusters were analyzed.According to the first results of the study, regions in Turkey are grouped into six clusters according to consumer prices, TR61 (Antalya, Isparta, Burdur) and TR82 (Kastamonu, Çankırı, Sinop) from these regions provide the best performance against the price increase, and TRC3 (Mardin, Batman, Şırnak, Siirt) region is in the lowest price increase cluster although it has been found to provide the worst consumer loans performance.
Keywords: Consumer Loan; Consumer Prices; Bank Sector; Cluster; Region.