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AFSAL: loan requests in non-banking industry are declined in 69% of all cases

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In the first six months of 2017 Alternative Financial Services Association of Latvia (AFSAL) issued a total amount of EUR 84.7 million in consumer loans. No increase is noted in this amount when compared with the same period of 2016. Increase did not exceed 0.2%, as reported by the association.

«If we look at the number of loan request rejections, we will see that loan requests in non-banking sector were rejected in 69% of cases. With that, no increase in the volume of issued loans is observed when compared with loans issued to other finance market participants. This is largely associated with investments companies had performed for technological solutions at the end of last year and beginning of this year to improve procedures for assessing clients’ solvency,» said head of AFSAL Gints Āboltiņš in regards to factors that had affected volumes of issued loans.

Data from members of the association shows that loans were paid back without delays in 90% of all cases in the first half of 2017.

«There it a lot of work left to do to improve reflection of data from the non-bank lending industry next year. The Consumer Rights Protection Centre reports on this once every six months. Until now compiled reports did not reflect the real situation. Because of short terms, loans that have already been repaid are not taken into account. Data also does not reflect loans that remain unpaid for years,» said Āboltiņš, adding that a correct methodology would help assess the effect state restrictions on service prices have had on industry data.

Association’s data also shows that slight changes have been noticed with the age of clients. There has been a 3 percentage point decline in the proportion of clients aged 20 to 24.

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