Translated material
Burden of Choice
The future of consumer lending lies with the credit card
The consumer boom continues. Citizens are increasingly given the opportunity to choose: apply for a loan directly in a store, apply for it at a bank, or use a credit card. Banks, competing with each other, simplify the procedure for issuing loans for urgent needs and issue plastic cards. At the same time, most experts believe that the latter are the future.What method of obtaining a credit resource for consumer purposes do Russians prefer? There is no consensus on this matter even among bankers. “In a number of large electronics retail chains, up to half of all mobile phones, almost 40% of computers and more than a third of large household appliances are sold on credit,” notes Anna Polyakova, head of the department for non-targeted loans at Renaissance Capital Bank. “And if it is possible to get a loan directly in the store, customers choose this option.” A different opinion is shared by the head of the sales department of Finservice bank, Evgeny Starodubtsev, who believes that “more and more citizens are directly applying for loans to bank branches.” The banker explains this by two factors. Firstly, store credit is significantly more expensive; this is usually an “impulse purchase”. Secondly, by receiving a loan directly from a bank, the borrower receives not goods, but money that he can spend rationally, for example, by shopping online (online stores do not pay for the rent of retail space, and goods in them are cheaper than similar ones in regular stores). stores).
Of course, the terms of a loan issued directly from a bank are, as a rule, more attractive for the client: lower interest rates, lower commissions. According to Lidia Hertsena, Deputy Director of the Retail Business Development Department of Promsvyazbank, this is due to the fact that “with express lending in a store, due to the short period of consideration of the application, the bank is not able to fully check the potential borrower, and the risk of loan non-repayment increases for the bank, which covered by the increased interest rate.” For “classic” loans, the bank requests documents from the borrower confirming his income, but for express loans such a document is not required. The latter can partly explain the still high popularity of express loans: the consumer is forced to overpay for the loan if he still receives a “gray” salary or lives on other “unconfirmed” income.
Price determines
What bankers agree on is that the preferences of most borrowers are most often determined not by the price of the loan, but by the price of goods purchased on credit. “Citizens prefer to purchase inexpensive goods on credit directly from retail outlets,” says Tatyana Kondaratseva, Deputy Director of the Retail Lending Department at Uniastrum-Bank. -- At the same time, for expensive goods and services, clients prefer to apply for loans for urgent needs at bank offices - in order to provide themselves with the opportunity to choose the place of purchase. Competition between banks is growing, and they are increasingly simplifying the procedure for issuing loans, which naturally leads to an increase in citizens’ demand for non-targeted loans.”
Deputy Chairman of the Board of Impexbank Elmira Tikhonycheva holds a similar opinion: “Today, the main trend in the banking sector is to simplify the procedure for obtaining a loan.” According to her, banks today strive to get as “close” to the client as possible, and in any large store or car dealership there is a sales office of one or another bank. Clients increasingly prefer non-targeted lending, which is natural, since the person who received such a loan can spend the money at his own discretion. In turn, the head of the retail business department of Transcreditbank, Grigory Ivashchenko, notes that citizens prefer to contact the bank directly to purchase household appliances, as well as in case of repair or purchase of a car. According to him, when purchasing other goods, most citizens apply for loans directly in stores, but recently there has been a trend of increasing requests to the bank for non-targeted loans and credit cards.
By the way, one of the innovations in the consumer lending market was the issuance of non-targeted express loans directly on the territory of large shopping centers - the bank's partners, where goods are sold that cannot be purchased from one seller and with one loan. According to Lydia Hertsena, in this case the client does not need to contact a branch or additional office of the bank: “The buyer comes to the store - a partner of the bank, submits an application for a loan and goes to choose a product. And within an hour he will be able to purchase the selected goods using cash received on credit.” The latest innovation, of course, reflects the general increase in demand for large loans, being a kind of hybrid of a non-targeted bank loan with a targeted one.
Competitor for growth
Meanwhile, consumer loans issued at the point of purchase have a growing competitor - the credit card. “More and more clients who constantly use credit when purchasing goods prefer credit cards to regular trade loans,” notes Anna Polyakova from Renaissance Capital. -- As a result, in the consumer electronics segment, where supply in the field of consumer lending has almost reached saturation, a number of retail operators are experiencing a decline in the share of sales on credit. At the same time, it can be assumed that in other sectors of retail trade (cars, cellular communications, computers and office equipment, as well as furniture and household goods) the share of purchases on credit will continue to grow.”
“In essence, a credit card is a regular card to which credit funds are credited,” explains Grigory Ivashchenko from Transcreditbank. “After all, if a client approaches a bank for the first time (without having a credit history with it), then the procedure for obtaining a credit card is comparable to the procedure for obtaining a loan.” At the same time, credit cards have obvious advantages over targeted and especially “store” loans: the presence of a grace period for lending, perpetuity and a significantly lower cost (interest rate).
It is no coincidence that the director of the retail lending department of the Moscow Credit Bank, Elena Khorkina, believes that “targeted loans, which now dominate the consumer lending market, will sooner or later be completely replaced by credit cards, and now we can confidently talk about the gradual displacement of commodity loans in trade by credit cards. points." According to Elena Khorkina, the time of commodity loans is coming to an end, and in the retail lending market there is a redistribution between the volume of credit funds issued in the form of consumer loans and loans received on credit cards. At the same time, the Moscow Credit Bank predicts an increase in the issue of credit cards by approximately 18-20% per year.
And Evgeny Starodubtsev from Finservice believes that, judging by the volume and scale of distribution of consumer loans, a real credit card boom can be expected in the near future. Today, many banks that were not previously involved in commodity lending are issuing credit cards to their clients. According to Evgeny Starodubtsev, the main advantages of cards compared to consumer loans are “revolvability” (funds returned to the card are again available for use), unlimited lending terms and the ability to use funds on the card at any time convenient for the client (in the case If the client does not spend the funds, he does not pay interest).
In addition, by acquiring a “card” client, the bank begins to build a long-term relationship with him: conscientious use of the card provides its holder with a good credit history and, accordingly, access to more favorable conditions for any type of lending that the bank provides.
For the New Year
What form of lending is best to use, for example, to buy a New Year's gift worth $1,000? Experts have differing opinions on this matter. “Of course, a credit card,” says Valery Torkhov, Deputy Chairman of the Board of Avangard Bank. “Compared to a targeted consumer loan, this is better, if only because you will have the opportunity to choose a gift and choose the store where you buy it,” he says. -- In addition, you will not waste time on applying for credit in the store, but during the holidays you will have to spend a lot of time on this procedure. Lastly, you can take advantage of the interest-free period provided to cardholders.” “If you plan to purchase in a large retail chain where credit cards are accepted for payment, and also if this loan is repaid in a short period of time (one or two months), it is more profitable to purchase a credit card,” advises Tatyana Kondaratseva. “And in other cases, you can think about taking out a consumer loan.” And Evgeny Starodubtsev directly advises using a Finservice loan for urgent needs, which allows you to get up to 50 thousand rubles. for a period of up to two years without confirmation of income level and certificate of employment. “If you know exactly what you want to buy as a gift,” says Elmira Tikhonycheva, “then we recommend purchasing this product on credit directly in the store by applying for an express loan. Moreover, during the pre-New Year period, as a rule, all sorts of sales and promotions are held, both from retail chains and from banks. If you need to buy several things, then it is better to take out a bank loan for urgent needs. However, the ideal way to purchase such a gift would be a plastic card with an overdraft with an interest-free grace period - by issuing such a card, you can always have credit funds available. And don’t forget that after the New Year there will be another March 8th, which, as you know, comes suddenly.”
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What do Russians buy on credit?
| For urgent needs | 14.1 |
| Furniture | 13.1 |
| Apartment or house renovation | 7 |
| Automobile | 6.4 |
| Computer technology | 6.1 |
| Real estate (apartment, house, land, etc.) | 5.4 |
| Educational, medical and other services | 3.2 |
| To purchase shares, bonds and other securities | 0.2 |
| Difficult to answer | 0.5 |
Source: NAFI