Czech market with loans without registry in the last three years significantly changed for the better. This was helped by the 2016 Act, which entrusted supervision of non-bank loans to the Czech National Bank.
The Loan and Credit also grants licenses to lenders who have to meet demanding conditions. As a result, the largest predators and various fraudulent companies have disappeared and non-bank loans have become safer, as they too have to meet a number of standards.
Non-banking companies are attracting to banks
But there were more changes. The biggest surprise for many people is that non-banking companies have created a truly competitive competition for banks and, according to surveys, they are already defeating them in some respects.
Large non-banking companies already provide loans at comparable prices to banks, and more often are more customer-friendly. This is confirmed by the independent test of People in Need, which compiles its Responsible Lending Index annually.
Three non-banking companies among the top providers
This chart shows some important things. In the overall assessment of the key indicators (loan costs, default penalties, helpfulness and transparency), large non-banking companies were successful and even ranked three in the top five.
However, smaller non-banking companies remained far behind. In terms of loan costs and non-repayment penalties, there is a sharp divide between small and large non-banking companies – you pay significantly more for the loan, up to ten times the size of the smaller.
E-Money leads the positive trend
The Czech loan market without a register is from the worst outside, but there is still a long way to go to Western standards. There are still companies that raise clients’ interest rates by 150% if they are late, failing to submit complete contractual documentation for review, or prevent clients from going to court in the event of a dispute.
However, there are also positive changes that our company E-Money as a large non-banking company has been promoting for many years. “ Many creditors have abandoned the charging of legal sanctions and are trying to negotiate with people. More importantly, four out of ten companies contacted do not charge contractual interest to people in the event of repayment, but settle for statutory default interest. We consider this a sensible practice, as debt increases often lead to a debt trap and will not help the lender or borrowers , ”says David Borges, who compiled the Index of Responsible Lending.
So if you are looking for a loan without a register, choose your provider carefully. The differences remain great. Here at E-Money you will meet with a helpful and transparent approach and as a large non-banking company we will offer you conditions with which you can be truly satisfied.