The beginning of 2014 is definitely a bad time for people who were planning to take out a mortgage, but now it can be seen that the credit market is still experiencing a revival, though driven solely by consumer loans. The increase in interest in loans has been noticed in practically every bank, but it is also not a big surprise for anyone.
No basis in Recommendations
KNF’s recommendations regarding consumer loans were not changed in a way that would explain the currently observed increase in interest in loans. For years, the KNF has tended to limit the availability of loans and cash loans are not unique here. The current provisions of the recommendations leave the banks quite a large margin to assess their creditworthiness, although there is still no liberal approach (and probably no sooner).
Difficult mortgages increase popularity?
As the Recommendation S regarding mortgage loans has changed, some borrowers have decided to even finance a small portion of their expenses with cash loans, despite the fact that they are more expensive and are definitely not intended for the financing of construction and renovations. In fact, the recovery in the credit market can not be reduced to analyzing the situation of mortgage loans, because the reasons are more and some are completely outside the sphere of economics.
Plans, dreams and resolutions
The new year is a great opportunity to take on challenges and resolutions. Not all can be made without access to cash, and those that involve expenses, sometimes need to be supported by an external source of financing. For years, the beginning of the year has been a period of intense promotions even in travel agencies and discounts in clothing stores. If we want to take advantage of the opportunity, sometimes we need credit support, which explains a lot of interest. Another thing is that you can not directly translate the interest in loans, that is, the number of applications submitted, with the number of loans granted. Here we should look at the economic situation of the average Polish family, which has improved slightly year by year, but not so much that we can finance our expenses in cash.
Credits are more popular because parabanks fall out
Parabanks, however more and more popular, have slowed down a bit and nowadays customers are getting slower than before. Smaller interest, despite quite aggressive, but usually local promotional campaigns, also enjoys financial products from the offer of cooperative banks. Banks remain the group of financial institutions to which we have the most confidence and which are usually the first option when it comes to loans. At the same time, the expansion of non-bank loans forced banks to include this new type of competitors on the market, making loans a bit more affordable, and it did not make them wait long for results: although credit is still as available as it used to be, and because it is cheaper, we are willing to indebt slightly more than usual.
How long will it take?
So far, the recovery in the credit market is clearly gaining momentum. It can be expected that as long as interest rates remain unchanged (and these are most likely to be addressed by the MPC at the beginning of the second half of the year), consumer loans will be very popular. Only raising interest rates will result in a slowdown or reversal of this trend.