Members of the Association of Non-bank Lenders have agreed that starting Monday, February 11, they will not issue loans to 18- and 19-year-olds. Such a restriction will remain in place until the state establishes a single credit register and provides for the possibility to check the income level of individuals.
Overall proportion of borrowers
“The overall proportion of borrowers between the ages of 18 and 19 is small. They represent only 5% of the total, and the repayment rates are also good. However, given that certain precedents may have a negative impact on society as a whole and this is a socially sensitive group, members of the association decided to limit the loan until the state establishes a credit register, giving non-bank lenders a legal right to check their association leader Baiba Fromane.
Recognize lenders who have agreed to conduct responsible business practices
In order to recognize lenders who have agreed to conduct responsible business practices, including those that will not provide loans to young people aged 18 and 19, the association has created a “Responsible Lender” brand. It will allow any consumer to make sure that the company in question has adhered to the Association’s Code of Good Practice, which provides for additional protection for borrowers and predictable terms of cooperation.
Non-bank lenders have embarked on self-regulation in the industry
“The decision of the members of the Association clearly shows that non-bank lenders have embarked on self-regulation in the industry, moving from word to word in the short term to introduce additional safeguards for borrowers. However, state support to the industry to address issues within its remit remains important. One is the creation of a credit register for solvency testing, while the other is the fight against illegal lenders by imposing stricter penalties, ”says the association’s chief executive.