..



.

Business News

Review of Small Amount Credit Contracts

  • Written by Debbie Bradley



VITAL NEW RESEARCH LAUNCHED INTO AUSTRALIAN SMALL LOANS INDUSTRY

The National Credit Providers Association (NCPA) has commissioned an update to the largest review of Small Amount Credit Contracts (SACCs), sometimes incorrectly referred to as ‘payday loans’, to provide the real facts and data on small loans in Australia.

NCPA has appointed specialists in financial services research CoreData, to conduct a second wave project to build upon last year’s groundbreaking review of the industry.

The first wave, covering the period 1 July 2013 to 30 June 2015, conducted in October last year, was the most comprehensive statistical review of SACCs, consumers, and ASIC licensed providers ever undertaken in Australia. The NCPA campaign Small Loans Big Need helped to demonstrate why SACCs are an important and successful credit option for so many Australians.

The work recently commissioned will cover the financial period from July 2015 – June 2016.  Findings from this next wave of research will provide a deeper understanding of how small loans are used; the role they play in Australians managing their finances; and the success of small loans as a financial product - especially for those who are not able to access traditional forms of credit from the banks.

Mr Phil Johns, CEO of NCPA remains concerned that while the recent Government Review of SACCs deemed small loans a much needed financial services product with highly successful repayment rates (9 out of 10 repayments are successfully met), the industry is still being targeted by some groups intent on shutting the industry down.

“It is highly important for the whole industry that we have up-to-date data, so not only can we demonstrate the need for small loans, but also combat the ignorance in the community about the role SACCs play.

“The new research will seek to demonstrate the highly compliant nature of the small loans product. It’s not just those who can’t or don’t want to access credit from traditional sources that use SACCs, it’s also those on higher incomes who want to access a loan quickly and out of working hours.

“A SACC has the highest level of consumer protection of any personal loan on the market and NCPA believes consumers need be aware of the responsible lending obligations lenders must go through. Despite some negative media small loans may receive, NCPA hopes the new data will help to educate individuals, the media, government, the banks and the wider credit industry about the differences between SACCs and illegal payday loans,” said Mr Johns.

SACCs are a small loan repaid between sixteen days and one year, up to $2,000, with set government fees and caps, including a debt spiral cap to give consumers ultimate protection. The majority of those borrowing these small loans are employed and trust this highly regulated government product.

For more information about small loans and the wider credit industry, please visit www.smallloansbigneed.com.au 

Key Statistics: 2014 -15

  • Completed applications received from new and existing customers: 2 million
  • Contracts entered into: 1.3 million
  • Credit advanced to consumers: $667 million
  • Number of consumers: 988,000
  • Average loan amount: $502
  • Average loan length: 117 days
  • Average male age: 37 years old
  • Average female age: 36 years old
  • The CoreData research project of over 2.4 million SACCs showed that in the quarter ending June 2015, 64.5% of SACCs were taken out by consumers whose main source of income was employment, up from 59.7% in the quarter ending September 2013. Conversely, in the quarter ending June 2015, 35.5% of SACCs were taken out by consumers who received 50% or more of their income from government benefits, down from 40.3% in the quarter ending September 2013.
  • Nine in 10 expected repayments were met, with a continued repayment uptrend. Matched by declining approval rates and increased loan completion success rates.
  • Multiple contracts are not a problem. Only 6.8% of contracts were written where the consumer had an existing SACC. 95% of lenders, as a matter of policy, do not loan to a consumer with a SACC in default.

For more information about Small Loans, Big Need visit: www.smallloansbigneed.com.au
The National Credit Providers Association (NCPA) is a mutual not-for-profit industry association, governed by a board of industry leaders. The NCPA represents the non-deposit-taking Australian Credit License holders, operating from nearly 300 retail locations or from dedicated online platforms.

  • NCPA’s diverse membership covers franchisors, franchisees, private and ASX listed companies, independent operators, small and large entities, who offer consumer credit under the NCCP Act. They all hold the same Australia Credit License as a bank and are also regulated by ASIC. The amounts lent range from $50 to $50,000, for terms from a number of weeks to several years. Some members provide just the one type of loan, some provide a range of loan services and other financial products, such as brokerage for commercial and home loans.
  • For more information visit:  www.ncpa.net.au

Business Daily Media Business Development

Bahrain Property Show 2018: How does it reflect the real estate market development in Bahrain

It is no secret that the Arabian Peninsula and the Gulf Cooperation Council (GCC) countries are currently going through a lot of pivotal changes. Such changes do not include economic or po...

News Company - avatar News Company

Di Jones real estate recognises high achievers

Di Jones celebrated its outstanding performers on Saturday (24 February 2018) evening at the Di Jones Real Estate Annual Awards.                               The black-tie Gala Dinner s...

Helen Hull - avatar Helen Hull

Five Reasons Melbourne Rules

If you are traveling in Australia and have left Melbourne off your destination list, then you are going to want to reconsider. Many people consider Melbourne to the best city in the world...

News Feature Team - avatar News Feature Team

Making Friends During Your Campsite Stay

Part of the excitement of vacation is meeting people who you would never otherwise encounter. Staying at a campsite isn’t just about taking in nature. It’s also about sharing the beauty of n...

News Feature Team - avatar News Feature Team

Have More Fun On Your Business Trips

Whether you are a traveling salesman or someone who finds themselves on the road more than in their office you probably are grateful for any tips you can get especially if they involve havin...

News Feature Team - avatar News Feature Team

Traditions of Rural Bali at Villa Sabana

A Privileged Insight into the Traditions of Rural Bali at Villa Sabana  Situated in the traditional village of Pererenan near Canggu, Villa Sabana is peacefully secluded in a semi-rural...

Linda Lim - avatar Linda Lim

Business Daily Media Business Reports

Di Jones real estate recognises high achievers

Di Jones celebrated its outstanding performers on Saturday (24 February 2018) evening at the Di Jones Real Estate Annual Awards.                               The bla...

Helen Hull - avatar Helen Hull

Eclipse Travel Expands Operations to New Zealand

Eclipse Travel, specialists in key adventure destinations such as Antarctica, the Arctic, Africa and Latin America, have announced today their expansion of operations to ...

Yvonne Kong - avatar Yvonne Kong

How medical professionals can benefit from an overall wealth management solution

As a health care professional, you have made it your life's work to focus on the care and health of the general public. While this kind of work can be extremely rewarding...

News Feature Team - avatar News Feature Team

Why Pinterest Should Be Part of Your Marketing Strategy

Pinterest is a growing social media platform that can deliver significant traffic to your website and new followers to your brand. With it’s steady growth and outrageous ...

Greg Nunan - avatar Greg Nunan

The top reasons why gyms fail

Steve Grant is a Business Coach and Founder of GymHub.com.au   Every month thousands of new trainers walk out of their 6-month course with the qualifications needed ...

Steve Grant - avatar Steve Grant

WHITE LABEL NOBA’s Winter 2016 season: Earth + Country

Taking cues from the warm winter colours of tobacco and caramel, and combining them with the strength of navy and the embracing lightness of whites and creams; and then...

Kath Rose - avatar Kath Rose

Former Etihad boss brings substantial event insight to PMY Group Board

Paul Sergeant PMY Group, the architects of the digital insurgency occurring at major venues across Australia and New Zealand, are delighted to welcome 35 year even...

Annie Konieczny - avatar Annie Konieczny

More training for coffee making than property sales: REINSW

Sydney 9 May 2016. An overhaul of education and training standards for the real estate profession must take place to help prevent illegal activities, according to the Rea...

Helen Hull - avatar Helen Hull