As reported by Rey Fernadez, in 2014, the financial indicators of the fast-credit sector dropped significantly. Specifically, quick lenders issued nearly 30 percent less in the first half of 2014 than in the same period a year ago. This is due to a number of factors, including the new Good Consumer Credit Center (GCRPC) new credit standards and the economic recovery (the economic crisis is over, though not new to the mountains).
Most direct impact on the financial ratios of fast lenders
GCRPC regulations have had the most direct impact on the financial ratios of fast lenders in 2014, as it was stipulated at the beginning of the year that lenders should ask their borrowers for monthly income and expenses, even though every couple of months with a higher loan amount and bigger troubles when they have to be returned. The number of transactions concluded fell by a quarter, indicating that interest in fast loans has indeed declined.
On the other hand, the situation with existing loans has even worsened. Although the number of overdue loans has decreased to 9.5%, their share in the loan portfolio has increased to 37.1%. Non-credit debts have only grown, although in the first half of 2014 the penalty cap is set at 100%. Half of the loans were granted without extension, and many people still extend the loan, which is first issued free of charge.
2015 for the fast credit industry
What is expected in the fast credit industry in 2015? Although the lack of media interest is not an indicator, it also seems that a further decline in the financial indicators of the industry is expected. On the other hand, if one believes in the popularity of fast loans as the population gets poorer, maybe 2015 will bring financial benefits to fast lenders. The last newcomers to the market appear to have been Good Finance, which, it seems, is a little behind the right moment to make their appearance. The latest entrants seem to be the illegal lenders , with the latest industry news.
Provide online services without a license
The somewhat diminished industry has recently been mentioned in the news only in connection with illegal foreign lenders who have opened accounts in Latvian banks and started to provide online services without a license of 70,140 dollars. While the scare is quite high, looking at these lenders’ websites concludes that it offers a disadvantageous and inconvenient service, so it’s not possible to talk about high competition. The only danger to competition from the industry would be the illegal pawn shops and private fruit growers, and at least the former are not hiding their business.
Begun issuing a credit line and offering consumer credit services
In 2014, several lenders changed their business form. Those who granted smaller loans are slowly opening the door to new customers offering larger loans. For example, industry pioneer Good Finance has begun issuing a credit line and offering consumer credit services, which in principle are simply consumer credit. Other lenders are also expected to start paying more attention to other types of loans this year. Perhaps those lenders who have not yet tried to break into foreign markets will find the problems of the fast credit industry a sufficient basis for expanding into other countries?