International Personal Finance Plc : Consumers think carefully before they borrow

30 Jan 2013

The vast majority of a consumer credit company's customers in Europe and Mexico think carefully before borrowing dispelling the idea that consumers are addicted to easy credit.

This is one of the key findings from the Financial Wellbeing and Inclusion Report from International Personal Finance, a leading international provider of consumer credit in growth markets. The report also found that consumers believe that credit has become more difficult to get in the last two to three years.

The research conducted on behalf of IPF by YouGov, a leading international, full service online market research agency, reported that 93% of those questioned said they thought carefully before borrowing money and a further 61% said they borrowed less than they were offered. This is in sharp contrast to some perceptions that lower income consumers are irresponsible or distressed borrowers.

Two thirds (63%) of IPF's customers thought that credit was more difficult to get in the last two to three years. Across IPF's markets in Europe, respondents in Hungary were most likely to say this with nearly three quarters (72%) claiming credit was more difficult to get verses only a third of people in Slovakia (35%). The Hungarian economy has been one of the hardest hit Central European countries since the crisis began in 2008.  

Only a small minority (7%) of the 11,000 people polled thought credit was easier to get with one in five (20%) thinking it was the same.

When YouGov questioned people on their ability to repay their loans, just over half of respondents (53%) said they can comfortably repay their repayments. This is highest in Mexico (79%), the Czech Republic (70%), Poland (70%) and Romania (63%). Encouragingly most people (93%) who were questioned said they thought carefully before borrowing money and this was consistently high across all of IPF's markets. The survey also found that only 15% borrowed on impulse and 86% never borrowed a sum that would be difficult to repay.

John Mitra, Group Corporate Affairs Director, IPF, said that it was very encouraging most people did not borrow more than they could repay without difficulty. "Nearly nine out of ten of our customers say they will not borrow more than they can repay and very few of the people we polled said they borrowed on impulse. This shows that people think carefully about taking out credit and whether it is affordable and their repayments sustainable."

"A minority (35%) claim to use credit as part of the way they manage their budget and we should continue to be mindful of this fact as should other mainstream lenders."

The report also showed that taking advice from a representative of the lender was the single most important aspect when taking out a loan. This was deemed more important than the internet, advice from friends and family and advertising.

The Financial Wellbeing and Inclusion Report is now available here.

Further information

Contact Nick Jones, Head of Communications, International Personal Finance

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