The non-bank loans sector has been operating in Poland for at least a dozen years. After the economic crisis of 2009, they gained in popularity. Currently, however, the Law and Justice government is introducing radical restrictions on the calculation of fees and interest related to payday loans, which is why the future of the industry is uncertain. an elucidation on payingoffpaydayloans.com
Value of the non-bank loans market
The data of the Credit Information Bureau from 2016 indicate that even 1.5 million Poles took loans from non-banking companies for the amount of $ 5 billion this year. The value of the entire market is also estimated enough. In 2015, the estimated value of the non-bank loan market was lower and amounted to approximately $ 4 billion.
After declining 2009, the importance of non-bank loans on the financial market in Poland is growing all the time. In 2011, there was a significant increase in the number of such companies as well as their turnover.
Who draws payday loans?
According to BIK, the statistical borrower of cash loans in non-bank institutions is young people. As much as 62 percent of them are not yet 34 years old. They are more often inhabitants of cities than villages. Female representatives are more willing to take loans than men. Among men, interest in non-bank loans is shown mainly by men aged 24 to 35 years old. Young people who are unable to provide their creditworthiness and sufficient credit history to the bank are becoming clients.
Optima was tempted to create a customer profile for the loan company. The study she commissioned (October 6, 2014) showed that the loans are used by:
- 63 percent women and 37% men,
- 30 percent people aged 51-60,
- 26 percent people over 60 years old,
- 18 percent people aged 41-50,
- 16 percent people aged 31-40,
- 10 percent people aged 18-30,
- 46% people with secondary education, 31% with vocational education, 15% with higher education and only 8% with primary education.
The much larger share of people aged 51-60 in the structure of non-bank borrowers in this study was most likely due to the fact that it was carried out among customers of loans sold only by advisers in personal sales channels. The situation would be completely different if the survey were carried out only in the online payday loans segment.
The same study showed that 9 percent. clients who take quick cash loans, claim they earn and live well, and use payday loans for convenience. Almost 30 percent borrowers are two-person households, and 26% singles.
For comparison, the results of the PBS study based on surveys from the end of 2012 can be indicated. According to PBS, micro-loan customers are:
- women – 63 percent, men – 37 percent,
- people aged 40-60 – 48%,
- persons with secondary education – 46%,
- married women, married people – 50%, single people – 50%,
- persons from two-person households – 75%
Why do we take out cash loans?
What are the motives that make a consumer apply for a cash loan to a non-bank company rather than to a bank or cooperative savings and credit union? Well, BIK based on the research pointed to several basic reasons:
- The desire to get money in the shortest possible time – borrowers do not want to waste time on a tedious loan process at the bank, since a non-bank loan can be obtained even within a dozen or so minutes of submitting the loan application.
- Low loan costs – in non-bank companies you can get an offer for the first free loan for which the annual real interest rate (APRC) is actually 0 percent.
- A minimum of formalities – taking a bank loan is associated with the need to submit to the bank, in addition to the loan application, also a number of certificates and other documents, while a loan can be obtained even only on the application or after confirming your identity online.
- Inability to provide proof of full-time income – many young people work on the basis of junk contracts at which banks have higher expectations, which is why the only alternative to such employees may be non-bank loans.
The purpose of the loan
According to the TNS OBOP survey carried out at the request of KRD, most often money from non-bank loans is allocated to:
- purchase of everyday items and payment of bills (36% of responses),
- renovation of a house or flat (32% of indications),
- purchase of a new car (17% of responses)
- payment for trips and holidays (3% of indications)
- purchase of medicines and medical expenses,
- purchase of new electronics and home appliances (29% of indications).
In turn, PBS in 2013 showed that the structure of the purposefulness of quick cash loans is as follows:
- 65 percent current expenses,
- 15% bills,
- 7% sudden illness
- 7% repayment of loan and other debts,
- 5 percent gifts,
- 4 percent own or family education.
In the same study, as much as 63 percent borrowers showed overall satisfaction with their commitment, and 70 percent were satisfied with the information on the cost of the loan. The majority of respondents declared (87% of responses) that they were serviced extremely politely.
Maintaining such customer service standards will allow loan companies to remain on the non-banking market, even when further restrictions are introduced by the government.