The microfinance market is strengthening every day. Various amendments to the law and strict regulation of this business by the CBA Bank strengthen the Payday Loan’s position in the credit sector. Large and medium-sized companies confidently feel in the market together with banks, which have long established themselves as reliable sources of loans. One such company, E Loan, together with the IK Credit, conducted a study that shows that different borrowers take Payday Loans and loans.
According to the study, the number of Payday Loan clients who did not apply to the bank for a loan to solve their financial problems is growing smoothly but surely. Two years ago, these borrowers were 40% of all who applied, now they are more than half – 52%. What is no less interesting, the number of approved loans is increasing both among this group and among those that have decreased. Those who came first to the bank were given a loan in 17 cases out of 100 (against 11 two years earlier), to fans of Payday Loans in 19 (against 9).
The number of approvals is growing among those who, during a month before applying to an Payday Loan, took a loan from a bank. This figure increased by 3% and accounted for one fifth of those who applied.
Payday Loan for new
Payday Loans and loans are taken by different borrowers – this fact is also confirmed by the fact that people who have never taken a loan have increasingly turned to microfinance organizations to gain similar experience. The number of such new borrowers is growing year after year. So, two years ago there were 16% of them, a year later there were 25% of them, and this year, 33% of borrowers came to the Payday Loans from the new ones in the first half of the year.
The Design Bureau believes that the growth of Payday Loan clients is related to the fact that people assess their opportunities in advance and, getting acquainted with banking products, or rather their conditions and requirements, decide to take a microloan, and not a loan. Most likely, these are people who have no official employment or cannot confirm their income.
All of the above data suggests unequivocal strengthening of microfinance organizations in the field of lending. The microfinance market is gaining momentum and becoming independent.