The payday loan market is booming. In 2018, the results achieved were encouraging and the expectation is that they will be even better in 2019!
The time is so favorable for this market that we decided to bring another blog post on the topic to the blog. Next, you can follow the results achieved and check the prospects for this type of credit.
The payday loan market in 2018
Granting credit is a complex decision that can pose risks to a company. Therefore, it is common for entrepreneurs and managers to always be looking for strategies that bring more security to the business.
In this context, it is important to remember that the payday loan is characterized by the payroll discount of the installment due. That is, even before the money becomes available to the consumer, the amounts referring to the debt are discounted and passed on to the creditor.
This aspect, added to the low interest rate, has contributed to a significant improvement in this market. In fact, Central Bank statistics make this pattern clear:
- INSS retirees and pensioners – 1.77% on 1/2/2018 and 1.52% on 12/31/2018;
- public employees – 0.07%, on 2/1/2018 and 1.14%, on 12/31/2018;
- private employees – 0.07%, on 01/02/2018 and 1.22%, 12/31/2018.
Regarding payday loans, it is possible to conclude that the year was good for those who worked with this model. From January to May, the equivalent of $ 30.2 billion was loaned. In October, the concession broke a record, reaching $ 18.2 billion – an increase of 33.7% over the same period in 2017.
Expectations of the payday loan market for 2019
As seen, 2018 was a positive year for companies that work with payday loans. Naturally, expectations for 2019 are the best.
As it is one of the cheapest lines of credit on the market, the number of consumers looking for it grows every day. As a result, loan sales are expected to rise further, revealing great opportunities.
In the first months of this year, it is possible to observe this trend confirmed. The Central Bank’s data indicates that, in January, more than $ 340 million were granted and, in March, this amount rose to more than $ 347 million.
With that, what is expected is a constant increase in these indexes. Thanks to the recovery of the economy and better conditions for consumers and entrepreneurs, this niche should grow and achieve good results throughout the year.
The new INSS rules for payday loans
Whoever wants to sell payday loans must follow changes in legislation. Therefore, you need to update yourself and learn about the new concession rules for INSS retirees and pensioners – an important target audience.
Normative Instruction 100 is already in effect and has brought about considerable changes. In general, in order to protect these consumers, the Government has tightened the process. Check out what has changed!
Credit can only be offered after 6 months of benefit
From now on, banks and finance companies must wait 6 months (180 days) to offer payday loans to new retirees and pensioners. With this, it is expected to reduce harassment and pressure on them.
This period is counted from the base date for granting the benefit and its non-compliance generates penalties for the company, which will be notified and may have its agreement with the INSS terminated.
Unlocking before the deadline must be requested in person
The beneficiary who wishes to contract a payday loan before the 6-month period must go to the financial institution and request the release of this operation. However, a minimum grace period of 90 days must be met.
In summary, it is only after 3 months that loans can be released. Before that, it is no longer possible to enjoy this modality.
Banks must provide more data on Payroll Credit Cards
Another relevant change is that banks and financial institutions must offer more information about the Payroll Credit Card.
Requests must be accompanied by an Informed Consent Term (TCE), which aims to answer questions from the retiree and pensioner about terms, cartoons and conditions of the contract and warn about indebtedness.
The advantages of offering payday loans to your customers
In view of such positive perspectives, it is possible to affirm that offering payday loans to its customers is an excellent alternative. But do you know what are the advantages of this decision? See below!
Lower risk of default
payday loans are a safer type of loan for the company. As the discount of the installment value is made directly on the clients’ payroll, the risks of not receiving it are much less.
Most attractive credit method
Working with a credit modality that has the lowest interest rates on the market is very advantageous. After all, the consumer is always looking for more interesting options and this can increase their sales.
Diversity of channels
Another interesting benefit is that payday loans can be offered through different service channels, such as the telephone and SMS. That is, face-to-face service is not a requirement, which even allows you to use automated solutions to increase your chances of negotiation.
Financial control of your customers
The rules for the granting of payday loans limit the commitment of income to 35%. This means that the consumer can only use this margin of his salary for this type of payment. With this, he can better control his expenses.
Possibility of being offered to negatives
Finally, it is worth mentioning that payday loans can be offered to negative customers in a more secure way. As the salary or benefit discount is made automatically, the chances of suffering from default are reduced.
Did you like the prospects for the payday loan market? As seen, 2018 was marked by important growth in this category, and 2019 promises to be even better. But it is always good to point out that, before starting to offer it, it is necessary to study and know the characteristics and rules of consignment well.
Learn how to sell more payday loans!
Now that you are on the topic, how about learning how to sell more payday loans? Click here and check out a video from our YouTube channel with tips that will make a difference!