According to data from Fresh Start, a nonprofit that assists highly indebted families and businesses, nearly 2.5 million Israeli households have overdrawn bank accounts, meaning their income falls short of their living costs.
The situation is alarming as that figure represents approximately 39% of the population over 18 years of age in April 2024. While living costs rise and citizens struggle to make ends meet, banks are making record profits by extending credit lines and charging high interest rates.
Living costs have risen in the country over the past period, thanks in large part to a series of tax and price increases during the ongoing war, while interest rates remain high.
The latest report from the Bank of Israel revealed that banks charged households with overdrafts an average interest rate of 12.7% in November 2024, up from an average of 11% at the end of 2023. Overdrafts held by Israeli citizens reached NIS 9.75 billion at the end of November.
Meanwhile, Israeli banks pay average interest rates of between 3.5% and 4% on NIS deposits, widening the gap and deepening households' financial problems.