Self-regulation means that a company or a person in itself, under the influence of external or internal pressure, makes changes without having to do so by obliging him to do so. Well, then, in the fast credit market, before the government began to adopt various laws to restrict the industry, these companies themselves started to build the LNC and started to regulate themselves to become more accessible to consumers and also to protect those consumers who They are unable to protect themselves and survive.
The Latvian Non-Banking Creditors’ Association was formed by bringing together most of the fast credit companies and the joint capability of agreeing on the different norms and actions they will all follow, after the news of the industry was promoted in various media.
This organization in itself determined that it would no longer be used
By young people between the ages of 18 and 20, as well as creating an application that would allow people to access these services in all companies that are members of that association. In Latvia, the industry itself also automatically sets interest rates on loans at around 10% per month, which is one of the lowest rates on European Union and beyond, as even the average interest rates on soft loans are up to 70% per month.
Latvian residents were not able to pay such rates, the representatives of the industry organically came to the rates that corresponded to the Latvian market! LNKA also states that non-bank creditors may not create misleading advertising campaigns, as well as those that promote different prizes or other services that are not related to the granting of credit but are solely intended to attract customers.
Promote responsible borrowing
The Association’s Statute states that all its members must promote responsible borrowing and that advertising material should also provide information on how to borrow and not notify irresponsible borrowing. And what’s more, important lenders are no longer giving out loans at night, because at that time people may not have the full mind of different alcoholic drinks! Creditors have also set up various mechanisms to deal with complaints about their actions and have developed guidelines for debt collection so that it is not too harsh for consumers and gives consumers enough time and warnings that if the money is not repaid, the case can come to court And, of course, it is also necessary to explain to customers everything about how repayment is, what the penalty interest is and what happens if there is no money in time, and what to do if it is not possible to repay the debt on time.
Regulation itself that it is not clear
It is precisely because the industry itself carries out such regulation itself that it is not clear to me because our country is interfering in this sector and, in essence, stops the free market by setting up these regulations and imposing both ceiling caps and other restrictions.
Such activities usually reduce competition and increase the chance that some large companies will stabilize in the industry and small censors will be pushed out. And, of course, the profit of lenders will be reduced, which will reduce their willingness to create new services and try to please their customers.