The Polish non-bank loan market is divided into two main product segments: purpose loans and cash loans. In August 2024, purpose loans dominated in terms of the number of non-bank loans issued, while cash loans led in terms of value.
Purpose loans are used to finance the purchase of specific goods and services and are typically issued for small amounts. The average value of a newly granted purpose loan in August 2024 was PLN 710, representing a 29.1% increase compared to the previous year. A key feature of purpose loans is that no cash is paid directly to the customer.
Purpose loans are most commonly used for small online purchases through e-commerce platforms. More expensive services, such as dental or aesthetic medical treatments, or car purchases, are also financed with purpose loans, though for higher amounts. These loans are usually short-term and tend to be repaid effectively. They exhibit characteristics similar to bank installment loans. The number of newly granted purpose loans in August 2024 dropped by 27.4% year-on-year (YoY), while their value decreased by 6.3% YoY.
During the first eight months of 2024, loan companies issued a total of 5.423 million purpose loans amounting to PLN 3.894 billion. This represents a 90.9% increase in volume and a 92.9% increase in value compared to the same period last year.
Part of this significant growth can be attributed to regulatory changes regarding the reporting of granted loans to BIK (Credit Information Bureau), which came into effect on May 18, 2023. Before this date, not all purpose loans were reported, resulting in a lower comparative base.
Cash loans, on the other hand, involve the disbursement of cash directly to the client’s account, which can be used for any purpose, such as household budget support. Cash loans tend to have a higher default rate compared to purpose loans. There are two categories of cash loans in this segment.
The first category consists of short-term cash loans, commonly referred to as “payday loans,” typically issued for small amounts. The second category includes long-term cash loans, often lasting several years and for higher amounts. This second type is similar to traditional bank cash loans.
The average value of a cash loan granted in August 2024 was PLN 2,833, a 24.5% increase compared to August 2023. The total value of cash loan sales in August reached PLN 1.269 billion, marking a 31.6% YoY increase. The number of cash loans issued also grew by 5.7% YoY.
In August, 448,000 cash loans were issued. In the first eight months of 2024, loan companies issued a total of 3.659 million cash loans (+35.4%) worth PLN 9.503 billion, representing a 55.8% increase compared to the same period in 2023.
As with purpose loans, the “regulatory effect” related to full reporting to BIK from May 18, 2023, also applies to cash loans.
Source: https://ceo.com.pl/sprzedaz-pozyczek-dla-klientow-indywidualnych-przez-firmy-pozyczkowe-sierpien-2024-r-33709
