"We see the jump in applications for non-bank credit in direct relation to the cost of living, following unexpected purchases of electrical goods, renovations, restrictions on credit cards and technological capabilities," says Gil Stav, CEO of Blender Israel, the international fintech company operating in Israel and Europe The company provides credit and financing solutions and completed the issue in Tel Aviv in January 2021. It should be noted that the average loan is NIS 23,688, while the average income is NIS 12,204.
"The reduction in cash also affected this.
The leading factor is car financing credit.
Also, we see an increase in credit for cosmetic treatments, on the order of NIS 7,000," adds Stav.
According to him, "On the one hand, everyone has reduced their credit limits, and on the other hand, there is an increase in interest rates, which means that we all have less disposable income left. The mortgage has gone up, the rent has gone up, and more. There is the issue of the cost of living, salaries have not gone up accordingly, and as mentioned, we have less free money left.
" However, people do not compromise their standard of living, and if someone wants to buy a new washing machine or refrigerator, they do.
Then the question arises is how to pay for that new refrigerator.
There is the issue of technology developments.
If in the past we wanted to buy in installments without harming the credit framework, we would have paid by check.
The second step was the credit cards.
The new revolution is 'buy now - pay later'.
"This means taking a loan and paying by standing order or in installments, without taking out the credit limit, but the real revolution is that I pay for the same product that I purchased. If I want to spread the purchase of the refrigerator into 36 payments, in the past for a refrigerator that would have cost NIS 8,570 I would have taken NIS 10,000 from the bank and I spend the rest. Today I pay the store exactly the amount in a process that takes less than a minute and leaves with the refrigerator."
"Paying for convenience"
However, it should be taken into account that this is a type of loan that has a high cost.
On this, Stav says that "We respond to all those whose credit limit has been blocked or who do not want to damage their credit rating. If someone's payments are returned or if he has difficulties in a given month, it will be exposed and it will affect the rating."
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