Last year, the volume of loans granted by non-bank lenders in Latvia decreased by 16.13%, as the director of the Center for Consumer Rights Protection (PTAC) Baiba Vītoliņa reported at a conference release Wednesday June 9.
Last year, non-bank lenders issued loans worth € 500.95 million in Latvia, 16.13% lower than the volume of loans issued in 2019.
The total loan portfolio of non-bank lenders decreased by 1.34%, from 764.33 million euros in 2019 to 754.09 million euros in 2020. 54.92% of this loan portfolio consisted of of leases and other vehicle pledging loans, 17.83% consisted of consumer loans, 21.6% consisted of distance loans and 4.87% of mortgages.
Vītoliņa explains that the reduction in newly issued loans is linked to the influence of Covid-19, as people are more cautious and lenders assess clients more carefully. There are also the high license fees, which have caused some companies to exit the market altogether.
The number of remote loans fell 31.91% last year. In volume, distance loans fell 16.55% last year.
A total of 398,515 distance loans worth 197.338 million euros were issued in Latvia last year.
The number of newly issued consumer credits decreased by 12.8%, while in volume these credits decreased by 16.48% last year. A total of 210,350 consumer loans worth € 110.911 million were issued in Latvia in 2020.
The amount of leases issued by non-bank lenders decreased by 11.95%. In terms of volume, leases fell by 15.6%. A total of 10,928 leasing loans worth € 147.782 million were issued in Latvia in 2020.
The number of newly issued mortgages fell 18.16% last year. In volume, the decrease was 19.08%. A total of 559 mortgage loans worth 7.383 million euros were issued in Latvia in 2020.
Pawn shops were down 20.41% in number and 14.27% in volume last year. A total of 475,849 pawnbrokers worth 37.538 million euros were issued in Latvia last year.
39% of loans newly issued by non-bank lenders last year were distance loans (197.338 million euros), 30% leasing (147.782 million euros), 22% consumer loans (110.991 million euros).
Vītoliņa also claims that the quality of the loan portfolio of non-bank lenders continues to improve year by year.
90.09% of loans did not experience any late payment last year (88.34% in 2019).
Last year there was a reduction in the number of short-term loans (quick loans) – by 97% in both loan number and size. Vītoliņa explains that fast lending services have either disappeared altogether in Latvia or have evolved into more traditional long-term lending options.