Gross household debt in Montenegro reached 2.66 billion euros on 31 August 2026, an increase of 358 million euros, or 15%, over the previous year, according to data published by the Central Bank of Montenegro. Economists warn that borrowing to meet basic living needs can point to a weaker standard of living. The bank’s representative is Milena Dakić.
The total covers bank loans, leasing from banks, account overdrafts and credit cards. More than 173,000 citizens use bank loans, while residents are increasingly buying clothing, footwear, household appliances, furniture, cars and property in instalments.
Cash loans without a specific purpose have reached 1.2 billion euros, equal to 45% of total household loans. They are used to finance property, cars, furniture and tourist travel.
Podgorica has the largest stated amount of household debt, with residents owing banks 1.16 billion euros, or 43.83% of the national total. A total of 67,982 residents of the capital borrow from banks, representing 39.22% of all borrowers at Montenegrin banks.
Economists warn about household pressure
Jovan Rabrenović, a representative of the Institute of Economic Sciences, said instalment purchases can help some people spread costs and buy more goods or services. For others, he said, they reflect weaker purchasing power and provide a way to obtain basic necessities. Rabrenović said some people “have to use instalment purchases to secure what is most essential for their lives.”
Economists consider borrowing to cover basic living costs concerning because it may indicate a decline in living standards. Rabrenović said that when credit is used for “elementary needs for life”, it shows that those groups have a lower standard of living than before.
At the same time, rising debt does not necessarily mean that living standards have fallen. A loan can, however, become an additional strain on a household budget if repayments begin to displace essential monthly expenses.
Before taking on new debt, economists advise borrowers to assess how repayments would affect their household budgets. Rabrenović suggested setting aside the planned instalment from earnings for three months and checking whether normal living costs and other operating expenses can still be covered without that money.
His example uses a monthly repayment of 200 euros, requiring a borrower to set aside 600 euros over three months. The test is whether the household can manage its regular expenses during that period without the money intended for the repayment.
