Template-Type: ReDIF-Article 1.0

Author-Name: Akos Aczel 
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: aczela@mnb.hu

Author-Name: Nedim Marton El-Meouch
Author-Workplace-Name: Magyar Nemzeti Bank, University of Pecs
Author-Email: elmeouchn@mnb.hu

Author-Name:  Gergely Lakos 
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: lakosg@mnb.hu

Author-Name:  Balazs Speder 
Author-Workplace-Name: Magyar Nemzeti Bank, University of Pecs
Author-Email: spederb@mnb.hu


Title: Household Loan Repayment Difficulties after the Payment Moratorium - Hungarian Experience from the Covid-19 Pandemic

Abstract: We examine the relationship between the widespread, long-lasting debt
forbearance on household loans introduced in Hungary at the outbreak of the
coronavirus pandemic and subsequent loan repayment difficulties. We estimate
linear probability and logit models at the contract level. Although our method is
not suitable for identifying causal effects, participation in the moratorium proves
to be a strong predictor of subsequent defaults. This is true even if we take into
account the wide range of relevant factors observed at the end of the general
moratorium period (October 2021). Our main results show that contracts which left
the general moratorium at the end of the moratorium and, within this, those that
took full advantage of the programme, were on average 3.2 and 4.2 percentage
points more likely to become non-performing in September 2022 than those that
never participated in the moratorium. This relationship can explain almost half of
the differences in default rates between the respective groups.

Classification-JEL: D12, D14, G28, G51
Keywords: payment moratorium, household loans, credit risk, non-performing loans, credit registry, coronavirus pandemic
Pages: 21-56
Volume: 22
Issue: 1
Year: 2023
File-URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-22-1-st1-aczel-el-meouch-lakos-speder.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:22:y:2023:i:1:p:21-56