TRANS-BORDER EXPANSION IN THE QUICK LOANS SECTOR (PROBLEMS AND SOLUTIONS)

The enterprises operating in the “quick loans” sector are microfinance institutions. Since they are not banking institutions, they need to adhere to more rigid financial management rules both in terms of fund raising and lending, especially regarding the so called “quick loans” category. The "quick loans" sector is defined as economic activity that, under the terms of the regulatory framework in force, allows a non-banking financial institution to provide unsecured (short-term) loans based on borrower’s income and credit profile and to charge high interest rates and added fees to offset the associated risk. The results of the survey confirm that this sector is a specific segment of the financial services sector that complies with the national regulations and creates a market for financial services that are essentially equivalent to the unsecured short-term bank loans but have profitability and return characteristics that make them competitive to the services offered by commercial banks. The successful of the financial management of these companies is based on their scoring models for assessing the risk of borrower’s default.