Syprodat flags pressure on borrowers, calls for fairer banking balance

The Cyprus Borrowers Association, known as Syprodat, on Wednesday called for decisive intervention to ensure interest rate cuts are passed on more fairly to borrowers, while urging stronger safeguards against foreclosures and a better balance between bank profits and social responsibility.

In a statement signed by its president, Costas Melas, the association said recent economic data point to a clear disconnect: despite relative economic stabilisation and easing European pressure on interest rates, many Cypriot borrowers remain under severe strain.

Banks, it said, benefited from the high interest rate environment of previous years, recording a sharp rise in income. At the same time, thousands of households and small businesses saw monthly loan instalments surge.

Even though borrowers have increasingly shifted towards fixed-rate products, the association added, meaningful relief has remained limited.

Particular concern was raised over Cyprus’ foreclosure framework, which continues to stand out at European level. Borrowers, Syprodat said, still face the risk of losing their primary residence without prior judicial review, a situation that deepens insecurity and fuels perceptions of social injustice.

The association also pointed to what it described as a growing paradox in the economy.

Near-full employment now coexists with rising financial pressure and poverty, which, it said, “proves that work alone is not enough when the cost of servicing loans remains unbearable”.

“Substantial intervention is required to more fairly pass on interest rate cuts to borrowers and strengthen protection against foreclosures,” the statement said.

At the same time, it added, “the balance between bank profits and social responsibility must be restored”.

“Financial stability cannot be measured only by numbers,” the statement concluded, “but also by whether citizens can maintain their homes and dignity.”