Recalling that fast credit on the Internet came to Latvia just before the start of the financial crisis – in 2007 – but tracing its spread, it can be concluded that it was quite popular even before the financial crisis. And yet, many attribute the boom in fast credit to the financial crisis, and there must be some truth to that. This article will investigate the factors that have helped the market for fast credit online.
Factors That Helped The Booming Fast Credit Business
- Credit Crunch – Individuals were no longer able to access consumer credit as banks took a stronger view of consumer solvency. A large part of the public was no longer in the group for which bank credit was available;
- Rising unemployment and falling incomes – With so many people losing their jobs and starting to get cash benefits, fast loans were the only way to get the money they needed, because the bank didn’t give it away.
These companies have a solid customer base that will not start borrowing with banks either.
A vacant niche is emerging – as banks “retreated” from granting consumer credit, demand for such a service was rapidly emerging in some segments of the population (including those with the lowest incomes).
- Convenient product, active marketing – the role of creditors themselves in the development of their products cannot be denied. From successful marketing to condemnation by the Consumer Rights Center (pizza for free, concert tickets, $ 10 for a friend), and ending with charity campaigns, you have to say, huge tax breaks – fast credit companies are active and energetic , which is quite a rarity in the Latvian market.
Will we no longer see fast loans after the crisis?
Hardly you can. It’s another thing for banks to venture into such higher-risk markets by offering competitive rates. Then, fast credit companies might have to tighten their belt. Of course, with the end of the financial crisis, the income of fast lenders is expected to decline, as time will tell, but all indications are. In the meantime, it must be said that – yes, in some respects, fast credit and its boom are related to the economic crisis, but the fast lenders themselves, not just the economic conditions, also played a major role.