Market trends of personal borrowing by taking credit

Rita Remeikiene, Ligita Gaspareniene, Reda Valinskiene

Abstract


Purpose. The main purpose of the paper is to research the market trends of personal borrowing by taking credit in Lithuania.

Methodology. The methodology of the research includes the analysis of the scientific literature, the analysis of the statistical data, systematization, comparison and summarization of the material.

Results.The results of the research have revealed that although the volumes of credits issued for physical individuals decreased by 20 per cent during the period of 2009 – 2013, the percentage of the credits still remains significant in the total structure of banking credits (40 – 45 per cent of the total market of banking credits). Thus, it can be stated that crediting of physical individuals makes a significant part of banking lending policy. The value of the newly established contracts for housing credits, consumption credits and leasing gradually increased during the period of 2009 – 2013 (the value of the newly established contracts increased by 11 times for housing credits, by 10 times – for consumption credits, and twice for leasing contracts), which shows the revival of the borrowing market after the period of economic/financial crisis. It has also been disclosed that although the number of the issued credit cards decreased by 34 per cent during the period of 2009 – 2013, the turnover of this market increased by 6 per cent, which confirms the signs of revival of the borrowing market in the country. Summarizing, the results of the statistical analysis presented above show that Lithuanian borrowing market has recovered after economic/financial crisis, which is confirmed by the gradual increase in the volumes of different kinds of credits as well as by the increased turnover of the credit cards market. On the other hand, credit institutions follow more conservative crediting policies while issuing credits for physical entities.

The theoretical contribution. The scientific literature usually focuses on the research of borrowing market in respect of issuing credits for legal entities as well as the analysis of the borrowing market as a single unit. The theoretical contribution of this paper is provision of systematic and complex analysis of the borrowing market in respect of issuing credits for physical entities in macroeconomic context.

Practical implications. The research covers the dynamics of the recent processes that have determined the current situation of Lithuanian borrowing market. That is why the results of the research could be engaged while forming crediting policies in credit institutions as well as performing more comprehensive research on Lithuanian borrowing market.


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