A world without credit?
Some have recognized the title of a book by Nicolas Pécourt, Director of Communication and Foresight of a well-known specialized financial company.
But this is also the question that the team of the founders of Good Finance posed before embarking on the ambitious project of creating the first accredited community credit institution in France.
A world without credit: is it possible? is it desirable?
Are not we going against the current consumer aspirations by creating a new financial society (although fundamentally different from all competitors)? At the same time, a friend had reminded me with humor of the quote of the German poet Berthold Brecht (1898-1956) “What is the most moral, create a bank or attack? “…
France is a country where credit has an extremely negative image, and where the question posed by the title of this post is probably most often asked. How did we get here ? … even though consumer credit is relatively undeveloped in France (the average outstanding per capita is lower than the average of the European Union).
Some invoke the weight of the history and culture of our country
For my part, it is especially the way in which we have often considered the customer in this sector of activity, which can explain this image so negative of credit. Do you know of other areas where, despite all the marketing teachings:
we offer the customer a product he does not understand? Everyone agrees that the rate (the famous APR) is one of the key criteria for assessing the cost of credit. But how many of the 9 million French households who hold a loan know how to link this rate to the amount of monthly payments they will have to pay? … who took the time to explain it to the consumer?
Systematically put forward a price to which the customer will not have access? Enticing commercials for credits with rates between 2% and 3% abound in transport, our newspapers, on television. But do you know that a tiny fraction of borrowers have access to it one day? because these rates often only apply to credits of € 10,000 over 12 months. Few of us are able to pay back nearly 1000 € a month.
We offer the customer another product than the one he asked for?
Too often, the revolving credit, more profitable for credit institutions, is proposed while the consumer has come to apply for a depreciable credit.
Yet, credit is needed, it allows households to access consumer goods otherwise than by drawing on their own resources. It also has a macroeconomic role, making it possible to smooth the fluctuations of consumption, and therefore of the economic situation. 5% to 10% of France’s GDP comes from expenditure financed by consumer credit.
So a world without credit, no. But a world for credit (again) customer-oriented, yes. And that is what Union loan intends to bring to this sector.