Czech Republic to tighten business loan regulations to curb predatory lending

The Czech Ministry of Finance has completed an amendment to legislation aimed at curbing predatory lending practices. These practices involve providing quasi-business loans with extremely unfavorable terms to gain access to debtors' real estate.

Experts have identified a phenomenon of “modern usury,” where consumers who are rejected by banks or licensed credit companies turn to business loans to avoid stricter consumer protections. This loophole has reportedly affected tens of thousands of people, often leading to the loss of their homes. The new regulations are intended to close these gaps and better protect small entrepreneurs and individuals from unfair credit practices.