Resumption of Loan Payments in Israel: Analysis of Frozen Loans and Consumer Credit Trends

According to data from the Bank of Israel, the volume of frozen loans decreased significantly in the months following January 2024. In February, the volume dropped to 63 billion shekels, and in March, it further decreased to 54.6 billion shekels. This means that Israelis have resumed payments on 45% of the loans that were previously frozen due to the war. It is important to note that most of the loans for which payments were resumed are commercial loans.

Of the loans that remain frozen, the majority, totaling 39.3 billion shekels, are mortgages, accounting for 6.7% of total mortgage loans. Additionally, 2.7 billion shekels of consumer loans and 7.3 billion shekels of small business commercial loans are still frozen. The loan freeze program, which has been extended twice, is currently in effect until June.

In addition to this data on frozen loans in Israel, it is also worth noting that there has been a significant increase in consumer credit in recent years as more and more people turn to credit cards and personal loans to finance large purchases or pay off debts. This trend has been driven by a variety of factors including low-interest rates and increased competition among lenders for customers’ business