In June 2020, 7% of individuals with effective credit registered with the Banco de Portugal Credit Register benefited from a public or private moratorium. The percentage of debtors who benefited from a moratorium is higher for ages between 35 and 45 years old and for self-employed workers. This may be explained by their incomes being more sensitive to shocks. In addition, the results of the 2017 Household Finance and Consumption Survey show that for these debtors the ratio between loan installments and disposable income is higher than the average. Debtors aged 65 and over and retired debtors, whose income was less affected by the crisis, resorted less to the moratoria. The resort to the moratoria is less differentiated by schooling level.

The share of credit covered by moratoria in total credit to households is low for households that typically have more vulnerable labour situations, such as the youngest, the least educated and the self-employed. More than 80% of the credit covered by moratoria is housing credit, which is secured by a real estate property and has low default rates. These situations mitigate the potential loss to the financial system arising from the materialization of credit risk after the moratoria expire.

For more details see chapter III 2.5 in Banco de Portugal Economic Bulletin, October 2020.

Prepared by Luísa Farinha. The analyses, opinions and findings expressed above represent the views of the author and not necessarily those of Banco de Portugal or the Eurosystem.

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