Prague - While the Czech mortgage business is experiencing a moderate decline this year, consumer lending seems completely unaffected by the global financial crisis and keeps growing by dozens of percent per year.

In January to September, Raiffeisenbank provided consumer loans worth CZK 2.7 billion, approximately 60 percent more than in the same period last year.

Clients of Česká spořitelna in the third quarter of 2008 took almost 76,000 consumer loans worth CZK 8.6 billion, a year-on-year increase by 43 percent.

And GE Money Bank has reported a 21 percent year-on-year increase in consumer lending in October.

"The high demand for consumer loans in the past year mainly owes to the fact that the approval process has become much simpler and faster," says Kristýna Havligerová from Česká spořitelna's press department.

Most bankers agree that the demand for loans will keep growing in the following months. They say that the Czech Republic is still way behind the rest of the EU in terms of how much consumers buy on credit.

Mortgages hit by credit & property crunch

While the demand for consumer loans keeps growing, the mortgage business has apparently been affected by the global banking and real estate crisis.

The Regional Development Ministry expects that individual home buyers will borrow CZK 120 billion this year, down from CZK 142 billion mortgage providers lent last year.

The downward trend has been due to two factors: Banks have toughened their criteria for mortgage approval, and potential home buyers have become more restrained since media started reporting on a looming decline in property prices.