Well, we have all heard that changes in the fast credit industry after 2016 are expected, but what they really will be very difficult to predict. Many say that more loans with smaller amounts will be issued, but again others predict that more loans will be issued with much longer loan interest rates, and that this will result in a more serious and sustainable lending model that will also provide non-bank lenders with long-term credit. income.
The non-bank credit sector was already large enough
Before the arrival of the fast loans in Latvia, as it included both leasing and consumer loans, but with the emergence of fast loans, the non-bank lending sector has grown to EUR 223 million in half a year, which would amount to more than 400 million over the year. Euro volume of loans issued. The next year 2016 will be a year of change that can mark new businesses that will overtake current market leaders as well as the bankruptcy of some companies that will not be able to keep up with the stiff competition and lower credit rates.
Of course, this industry will not disappear anywhere, and even if its credit and earnings fall, there will still be ways to provide more profitable services with greater profit opportunities. One example is that consumer credit and other long-term loans as car loans will be issued at higher interest rates, which in the long run will give creditors additional profits but will be less favorable for consumers. That’s why, every time a service is restricted, it seems to do good, but it turns out that there are other places where companies will be able to grow and profit.
Know the fastest return on short-term loans
The total BG credit market is increasing every year and it is this non-bank credit sector that is one of the fastest growing, as it is possible to get the fastest return on short-term loans from the total amount of money invested. And with small loans, this return is also the highest, and these small loans are usually also offered with a variety of services, either free of charge or with no interest credit, which then attracts consumers, but then they are not willing to give back the loans and therefore extend the loan terms. and generally, creditors derive greater benefit from such a service than from conventional loans.
It is difficult to predict consumer behavior after these changes in CRPC, but it is clear that these big companies will not stand still and will have to think about new and new opportunities, as well as earn on limited interest rates! But the fact that their total profits will fall is clear and it will only mean that there will be competition for the profits that will be available and possibly making the services more attractive to consumers.