Banks and SKOKs extended 0.8% more cash loans year-on-year by number in September 2023, according to the Credit Information Bureau (BIK). In value terms, there was a 13.2% increase.
The average value of a cash loan granted in September 2023 was PLN 23,471 – a 12.3% y/y increase.
In January-September this year, in numerical terms, more cash loans were granted by 6.1% y/y. In value terms, the value of cash loans was 12.2% higher.
“September’s positive sales dynamics in numerical (+0.8%) and value terms (+13.2%) confirm the positive situation in the cash loan market, especially in value terms. For a full assessment of the situation, it should also be taken into account that we show value dynamics in nominal terms. Using real terms, cleared of inflation, the annual growth rate in the value of granted cash loans is also positive at around +5%. The situation is a bit weaker in numerical terms, here cash loans in September this year y/y recorded only a slight increase. If we evaluate the condition of the cash loan market after three quarters, in value terms, the growth compared to the same period last year is +6.1% in numerical terms and +12.2% in value terms. So the situation is good.” said BIK Group Chief Analyst Waldemar Rogowski.
In the analysis of cash loans by amount ranges of financing provided, loans taken out for more than PLN 50,000 continue to attract attention, he added.
“In the three quarters of 2023, the range above PLN 50 thousand. there were the highest positive dynamics both in terms of numbers (+15.8%) and value (+18.9%). The same phenomenon also occurred in 2021. This phenomenon resulted in higher lending dynamics in value terms than in numbers. At present, loans of more than PLN 50,000 account for 12.2% of the number of cash loans granted in January-September this year, and for almost half (48.9%) of the total sales value of cash loans granted in this period. This is due in large part to loan consolidation, through which loans are granted for higher amounts,” BIK Group’s chief analyst explained.
Cash loans have a loss rate several times higher than installment loans (the highest among all product groups). September’s Quality Index reading for cash loans was 5.12%, the release highlighted.
“Compared to September 2022, the value of the Quality Index for cash loans worsened (increased) by 0.33 percentage points, while the analogous Index for installment loans increased by 0.36 percentage points.” Thus, it is still necessary to monitor the Index readings very closely in the coming months. The improvement in quality should be supported by both lower interest rates and real wage growth,” Rogowski pointed out.
Source: BIK and ISBNews
