An interesting survey that Landesferr is behind shows that as many as 84% of Swedes think that SMS loans should disappear from the loan market.
The objection first
First, one thing needs to be clarified which means that I have to put some question marks before the conclusions that can be drawn from this study. The question that was asked was “For those who need a fast loan, there are today the so-called SMS loans. Do you think they should remain in the market?”
Of course, it is common to use SMS loans as a term for the small loans that can be obtained quickly. But if you want to be careful, an SMS loan is a loan that you take via your mobile phone and the SMS function. This means that a similar loan that is applied for directly via an online application form is not an SMS loan but a web loan or another similar word. It is for this reason that we here on the site always use the word micro loan to name all these smaller loans with one word.
The question then is when to draw conclusions from this survey what people who have answered the question think that SMS loans mean. And if you need to think about such things, unfortunately, this is an issue that is incorrectly designed.
My guess is that they mean all micro loans but carelessly have called them SMS loans. But this is just a guess but it should not stop me from drawing some conclusions.
The result showed that as many as 84% of the 1,000 respondents thought that SMS loans would not remain on the market. This is a very high figure but many people thought it didn’t surprise me directly. With all the bad publicity that micro loans get from the media, it is no wonder that the public has a negative view.
In my world, I think people should have the right to borrow money if they so wish. This means that you should get a micro loan if you wish. Now, however, the right lies only in having the right to try to borrow money, but there is nothing to say that you have to be approved. Of course, I think lenders have the same right to refuse an application. And this is where there have been problems in recent years as far too many are getting approved when it comes to loans.
Instead, it is time for the lenders to take their responsibility and perform better credit tests that produce data that shows whether or not it is a suitable borrower. The stricter requirements for the applicant will also not be so much a problem with the repayments in the future.
Thus, unlike a very large part of the population, I think micro loans should remain, but that you should only lend to those who can repay. In the same way as for private loans, car loans, mortgages etc.
I don’t think it’s up to me to say what other people think about the prices. Personally, I think it is too expensive to borrow money in this way, but anyone who does not have the same opinion should be able to borrow. Only that person is well aware of what it will cost.