Increasing salaries and subsequent benefits paid by the government mean that loan companies grant fewer loans. But payday business is also shrinking for other reasons. The sale of credit cards with low limits is growing.
Although the ” Melin Cobinie ” program has been operating since April 2016, it has only recently become apparent on the non-banking sector. The trend we observed in April this year has perpetuated.
The ” Cobinie family” hits loan companies
According to BIK data, in the first five months of 2019, loan companies granted less payday loans and for smaller amounts than in the same period of the previous year. This is the first such situation since March 2017, when BIK began to analyze the loan market.
From January to May this year non-bank entities concluded 1.11 million contracts for a total amount of PLN 2.846 billion. In both cases, this means a decrease of just over 3 percent. compared to the same period of 2018.
The correction is even more visible in individual months. The number of loans paid ranges from 1 to almost 9 percent, and in the total amount of financing granted – from 4 to 12 percent. The latest increase in sales (but only in value terms) was recorded by non-bank institutions in March.
Since then, the average amount of payday pay has also decreased. At that time, the average value of the non-bank loan granted was PLN 2,681 (+ 7% y / y). In May it was already 2,480 PLN (-4% y / y).
The dynamics of the value of loans granted has been decreasing since May 2018. However, it remained positive until spring this year, and throughout the whole of last year. was +41%
Instantaneous loans lose their popularity not only through social transfers
What are the causes of this phenomenon? – In my opinion, this is not the result of one factor. It may be responsible for the increase in risk aversion on the part of entities financing loan companies, but also uncertainty about the further fate of the Anti-usury Act and an increase in bailiffs costs – explains the chief BIK analyst, prof. Waldemar Rogowski.
Only the low-value loans segment (up to PLN 1,000; + 5% in January-May) and high-value loans (over PLN 5,000; +0,7%) are still growing. The largest decreases (-12%) relate to a quota range of 1.5-2 thousand. zł.
Warning! All loan companies do not cooperate with BIK. About 80 of them do so, which control over half of the market.
Banks defend themselves against Cobinie
Banks also recorded lower sales in the discussed period. However, this only applies to low-value loans. In the first five months of this year, compared to the same period of 2018, banks granted 6% fewer cash loans in the range up to 2,000 PLN and 3% less in the range of 2-4 thous. zł.
The increase in household wages and social transfers can fill the deficit in the household budget, and thus reduce interest in low-value loans and borrowings.
At the same time, BIK informs that credit card sales increased significantly during this time (January-May). Increases can be seen in all quota ranges – by a total of 1/4. But the instruments with a limit of 1-2 thousand recorded the highest dynamics. zł. In their case, 51% was concluded. more contracts than a year ago.
Maybe some of the potential clients of loan institutions switched to credit cards and thus finance current expenses.
In his opinion, this was due to an increase in income resulting from both higher salaries and revenues from the “Family Cobinie” program. – In the past, lower income prevented such people from using this credit product – he notes.