Bank of Lithuania
2016-11-24
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Positive trends in the payday loan market continued into the third quarter of this year: payday loans that people are late to repay were dropping sharply in number. Following a sharp decline in borrowing volumes at the beginning of the year, in the second half-year they remain at similar levels.

‘The most recent data confirms once more that the positive trends observed at the beginning of the year are not incidental. In the third quarter of 2016, the number of payday loans with a shorter maturity overdue was the least in three years, which also reduces the number of payments with a longer maturity overdue. The tightening of the Law on Consumer Credit and permanent active supervision enforce lending that is much more responsible. The changing attitude of consumer credit lenders contributes to that as well,’ says Vytautas Valvonis, Director of the Supervision Service at the Bank of Lithuania.  

Over the nine months of this year consumer credit lenders granted 192.0 thousand payday loans – almost 3.5 times fewer compared to the same period in 2015, when 670.2 thousand payday loans were granted. The sum of payday loans granted decreased by more than half – from EUR 206.0 to EUR 100.3 million. The number of payday loans overdue decreased substantially. At the end of September, about 9.0 thousand credits were overdue for up to 30 days, which is almost 40 per cent fewer year on year (14.8 thousand). The number of credits overdue for longer (30–60 days) dropped even more – by 50.3 per cent (from 9.7 to 4.8 thousand). The number of credits overdue within these two categories is at its lowest since 2013, when this statistic was first collected.

 The number of payday loans overdue by duration

Due to the decreasing number of payments overdue for a short duration, that of old payday loans, overdue for more than 90 days, dropped as well. Such payday loans shrank by 2.7 per cent, to 172.9 thousand in number.

 The number of payday loans overdue by duration

In the third quarter of this year, ten companies, which had not submitted to the supervisory authority data and documents specified in the Law on time, were eliminated from the Public List of Consumer Credit Lenders. As a matter of fact, nearly all of these companies were not active in granting new consumer credits in the third quarter. Moreover, one company was eliminated from this List under its own request, while two companies were put on it. On 30 September 2016, the Public List of Consumer Credit Lenders (excluding credit institutions) included 54 companies, of which three were also on the Public List (35 KB )of Mutual Lending Operators.  

The portfolio of the mutual lending platform consumer credits continues to expand fast. In the third quarter of this year it expanded by 28.9 per cent quarter on quarter and amounted to EUR 5.9 million. This expansion is related to more consumer credits granted rather than the long maturity of credits granted (about 2.6 years) and slow credit amortisation.  

As of 1 November, the Bank of Lithuania handles the List of Persons Regarding Whom Requests Not to Allow Them to Conclude Consumer Credit Agreements Have Been Submitted. Natural persons are put on this List and eliminated from it at the person's request or by court ruling. For more information on the service ‘STOP: Consumer Credits’ go to the website of the Bank of Lithuania.

In this press release, consumer credits granted by consumer credit lenders – not credit institutions – are called payday credits. They do not include credits under linked consumer credit agreements and overdraft agreements. A linked consumer credit agreement is a consumer credit agreement when the consumer credit is designated to finance an agreement on the supply of specific goods or provision of specific services.  

Statistics for the third quarter of 2016 is available here (26.9 KB ).