During the period from the start of the quarantine on March 16 to April 15, there were 2,529 active consumer credit investors, compared to last year’s 2,865. Respectively, the number of active investors in both business and consumer credit this and last year was respectively 2,964 and 3,077.
That said, there has been a recorded drop in investment in consumer credit. From the start of the quarantine on March 16 to April 15, the average sum invested by an individual was 189 euro and was around 18% smaller than during the same period last year (230 euro).
“Due to lessened consumption during the quarantine, we have received fewer applications from solvent customers for consumer credit and respectively offered fewer to our investors. This is one of the reasons why the average invested sum is smaller than last year,” the head of Finbee Darius Noreika says.
Foreigners reduce investment sums
Data shows another trend as well – currently, unlike the same period last year, Lithuanians, not foreigners are the ones to invest larger sums. Last year, in the March 16 – April 15 period, Lithuanians invested an average of 208 euro into consumer credit, while foreigners – 355 euro. Meanwhile, this year the figures are respectively 194 euro and 161 euro.
“We have observed that the quarantine has negatively impacted the activities of popular platforms operating in Latvia and Estonia, which are popular among foreign investors and thus, they invest less in Lithuania as well. However, it should be noted that our platform’s business model fundamentally differs from foreign platforms. Furthermore, unlike most European countries, in Lithuania, P2P lending is regulated by law and the operations of all platforms, just like other financial institutions, are overseen by the Bank of Lithuania,” D. Noreika comments.
That said, the number of active and new Lithuanian investors has, as last year, remained far larger than that of foreigners.
Loan repayments made at the usual rhythm
Despite the current situation, an entire 78% of Finbee credit recipients make their loan repayments without being late a single day.
“Currently, we have received 43 requests to postpone loan repayments, which is just 0.9% of all our active loans. Six received requests have already been approved and their payments were postponed for 1-3 months,” D. Noreika comments.
According to him, just 5% of current Finbee consumer credit recipients are working in the sectors hardest hit by the quarantine – cafes, restaurants, hotels, beauty parlours, cosmetician’s offices. In order to reduce the risk taken on by investors, currently, credit recipients are evaluated especially carefully.
As a reminder, amendments were made to the consumer credit law in March, which obliged creditors to postpone loan repayment for up to 3 months to credit recipients, who cannot pay their interest payments due to reduced incomes.
Postponing of loan repayment will only be possible to those credit recipients, who have been making their payments in a timely manner and are currently not late on payments. Only the loan repayment is postponed. Credit recipients will have to continue paying interest every month, thus investors will not only not face any loss, but will actually earn more interest.
