Online Loans Are Booming: 25 Percent More Online Loans Granted
Every year in April, the banking trade association in its annual press conference on the annual business of the German financial industry. So too recently and had to report consistently positive in terms of so important for banks lending business. In 2017, for example, the commercial banks specializing in the financing of consumer and capital goods were able to significantly expand their business with loans. They issued new loans worth 56.5 billion euros to consumers, an increase of ten percent compared to the previous year.
Allocation of online credits increases significantly?
In particular, in the business with online loans , the financial institutions affiliated to the banking association were able to record a significant increase of 25 percent on the previous year. Overall, the share of online loans amounts to 8.5 billion euros, which represents 27.6 percent of the total lending business of the federated banks. Thus, more than every second installment loan in Germany is issued by a bank that is a member of the banking association. But despite all the positive developments in the lending business, there is still cause for criticism and the associated desire for changes on the part of the legislature. The reason for criticism here is the online credits and the associated possibilities of digitization, which however can not be fully utilized due to legal obstacles.
Digitization of online loans not fully feasible
“If you want digital progress, you also have to overcome the hurdles for digital financing”
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Because interesting is that with the loans just 1 percent of all available online loans were fully digitally recorded. And this despite the fact that banks, such as video ident, digital signatures, etc., are using a large number of banks organized in the banking association. However, the fact that the proportion of so-called fully digital loans has been so low despite the existence of appropriate procedures to date is not due to the lack of acceptance of these same processes by consumers, but rather to law-based obstacles. For example, the banking association criticizes the fact that, above all, the written form requirement for consumer credit stands in the way of the digital conclusion of an online loan. Accordingly, Jan W. Wagner, Chairman of the Banking Association, said: “Anyone who wants digital progress must also overcome the hurdles for digital financing.”
Most funded by credit? The car
Does the question arise as to what the German consumer still prefers to finance via credit? Of course the car – the German favorite toy. The share of car financing amounts to 22.8 billion euros. In 2017, the lending banks financed a total of 1.9 million vehicles, four percent more than in the previous year. The sum of all car loans granted by the member banks of the Bankenfachverband last year increased by six percent, from € 29.4 billion in 2016 to € 31.3 billion last year. The question, to what extent the Diesel-Gate affair had an influence, unfortunately remains unanswered.