Loans Risk Fueling Debt Tinderbox Under Economy: Turkey Credit

The Turkish central bank’s pledge to keep interest rates low is fueling a credit boom, perpetuating a debt-driven economic-growth model that Deputy Prime Minister Ali Babacan says is undesirable.

Lending to households jumped 28 percent and rose 41 percent for businesses in the year to Sept. 13, the banking regulator in Ankara said yesterday. That compares with less than 4 percent for households and companies in Poland in the year to June 20, and 12 percent for companies and 33 percent for individuals in Russia for the year to Aug. 31, data compiled by Bloomberg show.