It is really quick when you know that high cost lenders must also establish the debt ratio of customers. It involves comparing all of the client's commitments (recurring expenses, repayment of existing debts) with his gross income.
When this ratio exceeds 45%, the lender must even give the client a letter saying: "WARNING: you are about to conclude a high cost credit agreement. This contract contains an obligation on your part which is presumed excessive, abusive or exorbitant. " The GSMA represents the interests of mobile operators worldwide, uniting more than 750 operators with nearly 400 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors. The GSMA also produces the industry-leading MWC events held annually in Barcelona, Los Angeles and Shanghai, as well as the Mobile 360 Series of regional conferences. For the purpose of this briefing note, digital credit is defined as a service that meets the following criteria: • The service allows consumers to access a line of credit or advance that they agree to repay within a specified period of time. • The service must allow underserved people to apply for such credit and repay it using a mobile application, USSD or STK. Airtime credit products or services that offer mobile phones as another channel to access a traditional credit product are not included. • Loan decisions are instant and automated, and can laptops on credit leverage traditional sources of data, such as demographic profiles and credit bureau data, as well as non-traditional digital data, such as telecommunications data (voice, airtime); financial transaction data (mobile money usage); and social media data. • Applications, repayments processes and queries are managed remotely with no need for face-to-face interaction between borrowers and lenders. There are various ways in which MMPs can participate in digital credit services. Figure 1 presents some of the models which, for the purpose of this briefing note, have been assembled into two groups.5 Group 1 comprises the business models whereby MMPs partner with a licensed lending institution, and Group 2 comprises the business models whereby MMPs take part only as a channel through which the service is offered. This distinction is important because, as will be shown later, MMPs’ responsibilities differ according to the nature of the business model. Without rejecting my calculations, the Creditmatik team replied to me by email that "the products offered by Creditmatik are variable credit facilities, which are subject to rules distinct from credit contracts or simple money lending" . On its website, Creditmatik rightly explains that its personal loans do not have a fixed term. The reimbursements provided for each pay are, in fact, a "minimum payment". But the customer can reimburse more quickly, without penalty. And he can borrow more under certain conditions. We are still a long way from the definition of variable credit, which generally corresponds to a card or a line of credit where the amount loaned and the repayment period fluctuate according to the client's needs. Do you think I'm playing on words? But that makes a big difference, because the membership fees that add up to the bill at Créditmatik do not have to be included in the credit rate when it comes to variable credit, according to article 72 of the LPC. Comments are closed.
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