Дисекция на лихварския бизнес
It is no secret that the services of companies providing fast loans in Bulgaria are most often used by citizens who do not have access to bank loans because they can not prove regular income through documentation, and those who are in urgent need of funds. The risk of lending to such candidates is very high – about 30% of the loans get in some time overdue. Therefore, interest rates on such loans are tens or even hundreds of times higher than those asked by the banks. This is not a problem for people who take a credit of 200 levs over a month and give back to the company 300 levs. True the rate is very high – 50% per month, but a debt to this extent is justifiable if the case is urgent and it comes to episodic event and not in fact an attempt to live on credit.
The problem is that companies for quick loans are fed by customers who are literally stuck in
a debt swamp.
This is evident from their financial data that the Bulgarian National Bank (BNB) publishes. According to them, the total volume of loans granted by moneylenders is 1.98 billion levs. Of these, only 321.7 million levs are with maturity up to one year. All the rest are with a longer repayment period. Credits for about half a billion levs are with a maturity period of over five years. They are usually for sums of over 1,000 levs and for such a long period it turns out that a credit of 1,000 levs gets back to the lender a sum of about 6,000 to 7,000 thousand levs.
Curious is something else. The firms for quick loans, according to the C-Bank do not only deal with small loans made available to the general population. From reports of the BNB it appears that these companies provide also housing loans and the sums granted there are for amounts of over 10,000 levs. And this business segment is not at all small. The Central Bank’s data show that moneylenders have provided
a total of 335.5 million levs worth of housing loans.
If one has to repay in five years a housing loan of 10,000 levs at 100 % interest per year, the final sum to be repaid is not less than 60,000 levs. But as it can be seen, there are many people who still enter in such contracts. It turns out that fast loans are made not only for immediate needs, and for the purchase of household appliances, automobile and furniture and all sorts of goods, without which the debtors are generally able to survive, but do not want to change their standard of living. Another question is how they generate income to service such costly obligations and what the origins of such income are, after it cannot provide the needed documents for drawing a normal consumer loan from a bank, which will come out much cheaper. But these people do not complain to the media when they get pressed by their creditors for unpaid contributions.
The main part of the business of moneylenders, however, remains in the
segment of small fast loans.
It is noteworthy that just in the time when against moneylenders a storm of public discontent erupted, rather than wait and stoop, they began a frantic campaign in the media and on the web. And this campaign bears fruit. From a comparison of the data provided by the BNB it turns out that for the period from September 2013 to the end of the year, the total volume of granted consumer loans increased from 1.39 billion to 1.43 billion levs. The amount of the increase does not seem much for them – 40 million, but given that the vast majority of these are small loans up to 400 levs, it turns out that tens of thousands of people are resorting to these funds. No wonder then, most of them will be badly robbed by moneylenders.
There is no explanation why companies for quick loans are so active in an openly hostile environment. Their advertising campaigns are not aimed at improving their own image, but at expanding their market positions.
Some financiers the major lending companies are preparing to clear the market. It’s no secret that one of the requirements in the draft bill, which is being developed by the Financial Supervision Commission, will be for an increase in the capital of companies that are engaged in these business activities. Currently they are considering whether the sum should be 2 million lev, or 5 million levs. The current requirement is for companies granting such loans to maintain at all times a capital of 250 thousand levs. A sharp increase in this requirement will throw out of the market the vast majority of companies in the usury business. Out of the now present 126 companies no more than two dozen companies will remain that san show a capital of several million levs. Right now they are the most active in the advertising market, no doubt – in an early attempt to acquire a large share of it.
The BANKER
