The Crown Magistrate has now released statistics for the number of cases received to them in 2012 relating to micro-loans. Unfortunately, this is not a beautiful read.
It turns out that the number of loans ended up at Good Finance increased by as much as 62% in 2012 compared to 2011. This means that last year became the worst ever when it comes to the number of cases that have been received by Good Finance, which has to do with micro-loans. The previous record came in 2009 but last year this hit with about 7,000 cases.
Something special must have happened in 2012
Otherwise the statistics were positive when it came to this type of loan. As I said, it was previously the record in 2009, but after that, loans that had fallen into the Good Finance had fallen quite sharply over the next two years. Why now 2012 has become much worse you may wonder. In total, these are 53,709 microloans that have not been paid on time and ended up with debt collection and in the end with Good Finance.
I myself think that micro-loans are perfectly okay in principle. If you want to borrow a smaller amount and think that the price is within reasonable limits then you should also be able to borrow money. But as with all other types of loan, it is not a right to borrow any money. Therefore, it is important to have good control over who borrows. This is where a big problem lies.
It is often portrayed that it is young people who are constantly having problems because they take expensive micro-loans that cannot later be repaid. But if you look at the statistics from Good Finance this is not true at all. It is true that people between the ages of 18 and 25 are only the third largest category with their 21%.
Instead, the two largest groups are 26 – 35 years with 29% and 36 – 45 years, which accounts for 23% of all micro loans received. You must probably see this as something “positive”, since it is not only young people who are in trouble. Although the media often wants to make it sound this way. In my eyes, it doesn’t really matter who it is that is having trouble paying back a loan. It is always negative when it happens.