The requirements of the BRP Bank to microfinance companies are tightened every year, so many organizations close down because they are unable to fulfill these requirements. But, unfortunately, they do not cease to conduct their activities, and go into the shadows. Such organizations are absolutely uncontrolled and are free to set the rules, and, both before signing the contract with the client, and after it. This year, the RTY Bank is planning to introduce regular tightening, and this will necessarily lead to the fact that payday loans from immigrants will again grow in number. On the one hand, this is correct if the company is large and reliable – it remains in the system, the rest simply leave the market.
According to the Loan Experts
There are almost 6,000 companies on the microfinance market today that do not have the relevant documents for issuing payday loans. At the same time, officially registered companies only about 2000. These numbers are changing for the worse year after year. Each innovation of the BRP Bank concerning payday loans reduces the number of legal companies and increases the number of those companies that give up the status of an official Payday Loan but do not give up their business. The main problem is that such companies spoil the reputation of the microfinance market and reduce citizens’ trust in microfinance services.
But it is worth noting that the financial literacy of the population is growing and today the consumer is more selective in choosing an Payday Loan. After all, most of the information can be obtained without leaving your home – on the Internet. When a potential borrower could be content with a single point in the area of his house, he can now choose the appropriate organization on the Internet. And to sign the contract and receive the necessary amount, again, you do not need to come to the office of the company, wasting precious time. But, unfortunately, people often fall for the hook of an organization, believing that they will receive a discount and more favorable credit terms. After that, most of these people complain that they have been deceived, and such complaints spoil the reputation of the microfinance market as a whole.
Many people believe that payday loans are given to absolutely everyone, but this is not entirely true. All potential borrowers undergo multi-level testing because Payday Loan clients are usually somewhat more complicated than a bank customer. Scoring programs involve thousands of parameters, and new technologies help a lot.
The demand is very high
The demand for payday loans is growing every day, most customers coming from banks are attracted by the opportunity to get money online from the comfort of their homes. Most banks refuse their clients to issue small loans for a short time, and, not wanting to draw up a large loan, people go to the Payday Loan. This state of affairs forms the image of an Payday Loan client – lower wages or not official income, but this does not mean that these people do not want to spend money on entertainment or on the purchase of clothing and electronics. In some cases, they fail to take a loan from a bank and they turn to a microcredit company.