Generous Hearts, Empty Wallets: The Czech Republic’s Culture of Peer-to-Peer Lending

A recent study sheds light on a captivating aspect of Czech socio-economic culture: the propensity of seven out of ten Czechs to lend money to relatives, friends, or acquaintances. However, the survey, conducted by fintech company Bondster in collaboration with Ipsos agency, reveals a sobering reality – a third of these lenders often don’t receive their full amount back.

The research underscores that nearly half of the loans extended are to family members, while one in three Czech individuals has provided financial assistance to friends facing economic hardships. Notably, while women are more inclined to support family members financially, men tend to be more generous in lending to friends.

Pavel Klema, director of the investment platform Bondster, notes that money lending among peers is widespread in the Czech Republic. However, he emphasizes that while such loans are justified in emergencies like family tragedies or periods of zero income, a significant portion of the population’s poor financial literacy contributes to this phenomenon.

The willingness to lend money is often contingent upon the purpose of the loan, with people more inclined to assist in situations threatening the borrower’s livelihood. Nevertheless, a surprising proportion of individuals have extended loans for non-essential expenditures, such as vacations, with 1.5% even lending to strangers.

Age also influences lending behavior, with younger individuals typically lending smaller amounts compared to their older counterparts. Despite the majority lending money with the expectation of full repayment, a significant portion experiences partial or non-repayment, attributed largely to the absence of formal agreements.

Klema underscores that over 80% of lenders do not sign contracts or bills of exchange, contributing to the challenges of recovering lent funds fully. This highlights the need for improved financial literacy and prudent money management practices to mitigate the risks associated with informal lending arrangements.

While the Czech culture of peer-to-peer lending reflects generosity and solidarity, it also underscores the importance of clear communication, financial transparency, and legal safeguards to protect both lenders and borrowers in these informal transactions.

Article by Prague Forum

Recent posts

See All
  • Hans Weber
  • April 8, 2024

Neorenaissance mit Biergarten und Geschichtsbewusstsein

  • Hans Weber
  • April 8, 2024

Tatra Trucks investiert 700 Mio. CZK in die Zukunft des Werkes in Kopřivnice

  • Hans Weber
  • April 8, 2024

Umfrage: Tschechischer Präsident Pavel bleibt der Politiker mit dem höchsten Vertrauen in der Bevölkerung

Prague Forum Membership

Join us

Be part of building bridges and channels to engage all the international key voices and decision makers living in the Czech Republic.

Become a member

Prague Forum Membership

Join us

    Close