PTAC: Volume of new loans issued down 16.13% in Latvia last year – Baltic News Network
Last year, the volume of loans granted by non-bank lenders in Latvia decreased by 16.13%, as reported by Baiba Vītoliņa, head of the Consumer Rights Protection Center (PTAC), during a press conference on Wednesday, June 9.
Last year, non-bank lenders granted loans worth 500.95 million euros in Latvia, which is 16.13% less than the volume of loans issued in 2019.
The total loan portfolio of non-bank lenders decreased by 1.34%, from €764.33 million in 2019 to €754.09 million in 2020. 54.92% of this loan portfolio consisted leasing and other loans related to the pledge of vehicles, 17.83% consisted of consumer loans, 21.6% consisted of distance loans and 4.87% – mortgage loans.
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 customers more carefully. There are also the high license fees, which caused some companies to exit the market altogether.
The number of remote loans decreased by 31.91% last year. In volume, remote lending fell 16.55% last year.
A total of 398,515 distance loans worth €197.338 million were granted in Latvia last year.
The number of newly issued consumer loans decreased by 12.8%, while in volume these loans decreased by 16.48% last year. A total of 210,350 consumer loans worth EUR 110.911 million were granted in Latvia in 2020.
The amount of leasing loans issued by non-bank lenders decreased by 11.95%. The volume of leasing loans fell by 15.6%. A total of 10,928 lease loans worth EUR 147.782 million were issued in Latvia in 2020.
The number of newly issued mortgages fell by 18.16% last year. In volume, the fall was 19.08%. A total of 559 mortgage loans worth €7.383 million were granted in Latvia in 2020.
Pawnshops fell 20.41% in number and 14.27% in volume last year. A total of 475,849 pledge loans worth €37.538 million were issued in Latvia last year.
39% of new loans issued by non-bank lenders last year consisted of distance loans (EUR 197.338 million), 30% in leasing (EUR 147.782 million), 22% in consumer loans (EUR 110.991 million ).
Vītoliņa also asserts that the quality of the loan portfolio of non-bank lenders continues to improve year by year.
90.09% of loans experienced no 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 number and loan size. Vītoliņa explains that quick loan services have either completely disappeared in Latvia or have evolved into more traditional long-term loan options.