Facts and analysis: The small loans market and regulation in Lithuania


Lithuanian Free Market Institute, May 2014


The small loans market (quick credit, pay-day loans) often gets a lot of criticism in the media. Its critics state that the market has too little supervision; that the industry does not properly assess the ability of customers to repay their loan; and that interest rates are artificially high. In October 2013, the Lithuanian Central Bank introduced a new amendment to consumer credit law under the Ministry of Finance. Parts of this amendment are very strict and their implementation will have a significant negative impact on the consumer credit market. This impact will be felt not just by financial providers, but by their customers as well, as access to consumer credit becomes more difficult.


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