We chart the loan market – How it grows

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The demand for fast loans is a statement that is hard to say. But, exactly how fast is demand growing? The fact that the number of fast loan companies offering small loans in Sweden is also growing is also a truth that does not require any modification.

But, what is the growth rate really like? Svenska Dagbladet has requested data on fast loans from Good Finance and presents them in an article in its business section. In this blog post we will take a closer look at the most interesting information.

24 new high-speed mortgage companies in 2016


In the second quarter of 2015, a total of eight fast-loan companies were licensed by the Swedish Financial Supervisory Authority. One year later, at a snapshot for the same quarter, the number was 32 instead. The market has thus grown substantially in just twelve months.

Note: These 8/32 players are those who have permits that are handled by the rules of the Act on Certain Credit Consumer Activities. Existing credit market companies and banks can offer fast loans and similar consumer loans without the need for special permission.

134% growth in credit volume


It is not only the number of lenders that is increasing, the credit volume itself is also steadily increasing. During the second quarter of 2015, the outstanding credit volume for fast loans totaled approximately SEK 720 million. One year later, it was around 1.69 billion. This corresponds to an increase of about 134%. If we look at the volume actually granted during the respective quarters, the increase is even more dramatic, namely 154%.

As a result of the increased credit volume, of course, interest income and fee income also increase. Credit losses for high-speed mortgage companies also increase, of course. Interestingly, for the latter, the increase is not at all equivalent to that for the credit volume.

In Q2 2015, credit losses were approximately 36.5 million. For the corresponding quarter this year, they were about 62 million. This is an increase of just under 70%. One reason why the figures are not being followed is that there has been a “tightening up” of the fast loan companies following the new legal requirements regarding credit testing. The fast-loan market is becoming increasingly serious and lending is becoming increasingly focused on borrowers’ needs, and this is something that is evident in Good Finance’s figures.

Tax revenues increase more than interest income

Tax revenues increase more than interest income

A fast loan company has two ways to charge for issued loans, namely interest and fees. Combinations can also occur, but usually one or the other applies. The change in interest income between 2015/2016 was 107% while the change in fee income was 360%.

According to this information, there are more fast-loan companies that either opt out of interest rates for fees or begin to combine the two methods of charging. One reason may be the larger number of quick loans on slightly larger amounts with longer repayment times. For these amounts, a set-up fee is often charged in addition to the current monthly interest rate.