According to the data, the penetration rate of credit products has exceeded 80% among Chinese young people, and overdue loans are also rising. What do young people look like? What is behind the debt? What is the impact of consumer loans on young people? How to face up to loan consumption? With a variety of problems, the reporter investigated those young groups of borrowing and consumption, trying to restore the real situation.
As a senior online shopping user, Cheng Li completes most of her shopping online. She has used and is familiar with payment tools such as white notes and Huabei. I dont need my own money if I can use credit. Cheng Li said. In a shopping payment process, Cheng Li found that using Huabei payment can reduce a certain amount of money. With the mentality of saving money, Cheng Li tried. Since then, the platform will default to use Huabei payment for each purchase payment. I didnt think it was bad, so I used it all the time. After the monthly bill comes out, Cheng Li will pay off the arrears in time, never overdue. In this way, I can not only do financial management with the cash in hand, but also meet the shopping demand by stages with consumption, and there will be no debt. Why not do it? Cheng Li said.
It is not difficult to see that consumers of consumer loans are to meet all kinds of consumer demand, but the understanding and repayment planning of consumer loans are different. According to the report on the debt situation of young Chinese consumers released by Nielsen market research company in 2019, the penetration rate of credit products among Chinese young people has reached 86.6%. After deducting the part of payment instrument, the real debt group of young people in China accounts for 44.5% of the total young people.
According to the data released by the central bank, as of June 30, 2020, the total amount of overdue credit card loans nationwide has soared to 85.4 billion yuan, more than 10 times that of 10 years ago. Among these overdue borrowers, the post-90s accounted for almost half. As a result, the public opinion is quite controversial about the excessive consumption and debt of young consumers.
The game between reason and desire
For borrowing consumption, different people have different understanding, and it is the difference in understanding that makes them embark on a different path.
For Cheng Li, the main motivation for her frequent use of consumer loans is: first, she can save her cash to do financial management; second, she can accumulate credit points on the platform. When your credit score is high, like a VIP customer of a bank, you can enjoy some privileges, which is like an honor to me. Third, the wide application scenarios of these e-commerce platforms are also an important reason for the popularity of their consumer loan products. My payment credit is high. I dont have to pay a deposit to rent a shared car, bicycle or power bank. I also have a discount when I stay in a hotel. Fourth, consumption accounting can be carried out. All the money Ive spent on the platform has traces, and I can see clearly how much Ive spent and what Ive spent over the years. Cheng Li said.
Looking at the people around me, I also want to have it. The first time I try to consume ahead of time cant stop. Less than is a member of the debtor alliance.. He wrote in the post that he didnt think too much about borrowing money. He only felt that he would spend money if he had money. Moreover, he did not have strong self-control. Before that, he was in debt and did not have to eat, drink and play. But now the debt has reached nearly 100000 yuan, which is expected to take two years to pay off.
Logic behind expansion
On the whole, domestic companies engaged in consumer finance can be roughly divided into three categories: commercial banks, licensed consumer finance companies and Internet consumer finance platforms. Internet consumer finance platforms include Huabei, Jingdong Baitiao, meituan monthly payment, Suning voluntary payment, etc., while licensed consumer finance companies include home credit, Zhaolian and other platforms.
The reporter observed that since this year, under the epidemic situation, as an important market main body of consumer finance, commercial banks have given sufficient preferential treatment on consumer loan products, not only increasing the loan amount, but also generally reducing the loan interest rate, and some interest rates even dropped to about 4.5%. As the most common financial instrument of over consumption, credit card has been issued a large number in recent years. Some data show that during 2015-2019, Chinas card issuance continued to grow, with an average annual compound growth rate of 14.5%. In 2019, the number of credit cards issued in China will be 746 million, an increase of 8.75% over the same period of last year, and the efforts of banks to promote credit cards to consumers are also increasing.
All this has led to the rapid development of domestic consumer financial market. According to the data of the banking association, although there was a decline between 2017 and 2019, the growth rate in 2019 was still 15.92%, higher than the average growth rate of other types of loans such as personal loans. By the end of 2019, the asset scale of 26 consumer finance companies in China has reached 498.807 billion yuan, and the loan balance is 472.293 billion yuan.
What is the business logic behind borrowing and consumption? First of all, from the perspective of obtaining loans, it is undoubtedly quite convenient. You can get the account by a few clicks on your mobile phone, and you can also pay by instalments. The daily interest is only a few oclock. Before, I didnt know who to borrow it from. Now its all in hand. Ill choose who to borrow from. Li Guang, who lives in Changsha and has just worked, describes the consumer loan advertisements he saw.
Secondly, from the perspective of borrowing costs, the reporter found that the loan interest rates displayed by various consumer financial platforms are different. After logging into several consumer loan platforms, the reporter found that nearly 80% of the platforms did not mark the annualized interest rate, and only publicized the loan interest in terms of minimum daily interest rate and average daily repayment, which were not completely consistent with the actual implementation rate. This is because, in addition to the loan interest rate, there is a service charge.
According to the reporters rough statistics, only Huabei, home credit consumer finance, BOC consumer finance, Ping An consumer finance and BOC consumer finance show annualized interest rates on the page. If you directly use annualized interest rate, plus service fee may be as high as 30%, some customers will be scared away. This is why some consumer loan platforms choose to display daily interest rates when marketing.
Under such high borrowing costs, what about the non-performing rate? According to the data of the banking association, in 2019, the average non-performing loan ratio of consumer finance companies is 2.63%, slightly higher than the average non-performing level of credit cards, which is 0.11 percentage points lower than that in 2018; in terms of the median non-performing rate, it is 2.03% in 2019, up 0.1 percentage point compared with 2018. In the first half of this year, the non-performing loan rates of ICBC, ABC, CCB, BOCOM and postal savings bank were 2.65%, 1.81%, 1.17%, 2.9% and 1.99%, respectively.
It is not difficult to see that the consumer finance platform still has a fairly good profit situation at present with high loan interest rate and low bad debt rate, excluding the cost of capital. Take ant group as an example. Among the 72.528 billion yuan of ants revenue in the first half of this year, the micro loan technology business (including consumer credit and credit for small and micro operators) contributed nearly 40% to the groups income.
Pinch scale and boundary
The existence and development of consumer finance stimulate and promote the consumption ahead of time, which makes some personal debt increase rapidly. This conclusion seems to be very correct. However, as an independent commercial subject of consumer finance, it realizes commercial value and gains profits through legal operation, and disseminates the concept of consumer credit to target customers in the process of operation, which is essentially the same as the product concept publicized in any product conference, that is, consumer demand can be realized through financial means, and capital can be realized through financial means The reconfiguration of the source is a very normal consumption behavior.
It is undeniable that the low threshold and convenience of consumer loan enlarge the desire of consumption to some extent. There is no sense of how much money has been spent because there is no need to pay in cash. Liu Guang said. Many of the users interviewed by the reporter have similar feelings with Liu Guang. In the face of consumer loans, how much they spend is just a change in the number on their accounts. Users are not sensitive to money and are not distressed to spend it. What cant be ignored is that if the consumer loan is due, it can be paid in a lump sum, but it will not generate any cost, but if the payment is made in installments, the cost will be very high. This also makes Liu Guang choose to consume by stages more carefully.
However, the focus of public opinion controversy is that consumer loan is aimed at a relatively young population, and there is a mismatch between consumption capacity and consumption demand. This group of people generally lack of independent judgment and are easily affected by the outside world. Under the guidance of consumer loan publicity, it is easy to have blind and irrational consumption. Therefore, consumer finance is often regarded as a failure to fulfill its social obligations and responsibilities, which is against business ethics.
However, there are still a small number of young people who have tasted the sweetness of consumer goods and continue to borrow money, and their appetite is growing. According to the rules, as long as you pay back on time, the system will encourage you to borrow more money. If not, the system will also kindly provide you with installment repayment service, it seems that you only need to pay a little money a month. This kind of installment payment will further paralyze the borrowers judgment, mistaking repayment as easy. Handling charges, installment service charges and disguised profits will eventually drag people to the abyss.
In the view of the industry, the scale of the platform lies in risk control. An employee of a payment company in Shenzhen told reporters, in fact, the risk control of e-commerce platforms like ant and Jingdong is very good. The amount of credit given to users based on big data is basically reasonable. As long as you dont borrow money from multiple platforms or support loans with loans, there is no risk that you cant afford to use reasonably.
Facing up to value and embracing supervision
Borrowing consumption has been very common in the United States in the 1920s, but it has also been challenged by social culture. It was not until 1927 that the American society generally recognized debt consumption. One of the purposes of the development of the financial market is to alleviate the imbalance of peoples consumption power caused by uneven income at different ages by means of housing mortgage loan, automobile loan and education loan.
However, there is a view that borrowing money to start a business and put into productive activities is productive lending, while consumption lending is used for eating, drinking, playing, clothing, food, housing and transportation. For this, Columbia University Professor Seligman once mentioned in his book the economics of installment sales that there is no essential difference between the two, because consumption is also production There is no consumption that can only be imported and exported. In his opinion, on the surface, a person uses up his money and produces nothing, but in fact, the consumption expenditure of a person is also an investment in production, an investment in human capital. If a persons house is comfortable, his car is good, and he is dressed smartly, he will work harder and harder, and he will be able to make more business and create more value. In addition, according to the research and analysis of a large number of personal borrowing consumption data in the United States, debt consumption will make consumers more financial discipline and self-discipline.
At the same time, we should also face the ecological construction of consumer finance. As a tool to support borrowing and consumption, the Internet platform needs to be more standardized and strengthen risk control. Jiang Han, a senior researcher at Pangu think tank, believes that the Internet platform should establish credit model more accurately, such as credit threshold, credit line, term, repayment cycle, risk plan, etc., so as to strengthen the self-discipline of the whole market. The two recently released documents can also reveal the attitude of the regulatory authorities towards consumer finance. On the one hand, the new regulations on small online loans were issued in early November, which put forward a series of restrictive measures for small online loans; on the other hand, regulatory authorities issued documents to reduce the provision coverage rate of consumer finance companies and broaden market-oriented financing channels, which are considered as a heavy signal to promote the development of consumer finance companies. In fact, this years approval of the establishment of consumer finance companies has indeed entered the fast track, and five new consumer finance companies have been approved and raised. It can be predicted that under the background of smooth domestic circulation, there is still a great development space for consumer finance in the future without the occurrence of a large number of bad debts and complaints. Source of this article: Chen Hequn, editor in charge of securities times_ NB12679
The two recently released documents can also reveal the attitude of the regulatory authorities towards consumer finance. On the one hand, the new regulations on small online loans were issued in early November, which put forward a series of restrictive measures for small online loans; on the other hand, regulatory authorities issued documents to reduce the provision coverage rate of consumer finance companies and broaden market-oriented financing channels, which are considered as a heavy signal to promote the development of consumer finance companies.
In fact, this years approval of the establishment of consumer finance companies has indeed entered the fast track, and five new consumer finance companies have been approved and raised. It can be predicted that under the background of smooth domestic circulation, there is still a great development space for consumer finance in the future without the occurrence of a large number of bad debts and complaints.