Forward credit in the Baltics


A study by GfK Custom Research Baltic and Industry on the financial sector in the Baltics reports that 22% of Latvian residents surveyed on the Internet have used Forward Credit in the last month. In Lithuania and Estonia, Forward Credit with such popularity does not stand out – 18 and 5 per cent of respondents, respectively, used the service.

Who in Latvia, Lithuania and Estonia uses Forward Credit

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In all the Baltic countries, the most popular application of Forward Credit is for grocery shopping and daily expenses up to salary. On average, 40% of borrowers use Forward Credit for this purpose. Lithuanians, on the other hand, are more likely to use Forward Credit to pay off other debts – 22% of respondents in Lithuania say they use Forward Credit for precisely this purpose.

Estonia is distinguished by the fact that Forward Credit is used to repair a car, but in all three Baltic States about a tenth borrows to get money for entertainment or travel.

Reasons for the Unpopularity of Forward Credit in Estonia

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In Estonia, Forward Credit was introduced more quickly, so the public is more aware of it. In addition to the fact that it has been linked to widespread crime cases since its inception, such as how inmates have been cheating jobseekers through SMS credit, SMS credit has received much more negative press in Estonia than in Latvia.

There has also been a sharp decline in the number of complaints received by the Estonian Consumer Protection Association, which received only 16 SMS credit questions in 2010, as opposed to 2009 and 2008, when it received more than a hundred questions and 10 complaints. This means that in Estonia consumers are becoming more educated about the problems that can arise with SMS credits.

In addition, in Estonia, it is more common to hear the press of Finland, the birthplace of SMS credit, while in Finland, SMS credit is known to be fought, for example, by allowing loans to be given only on weekdays from 9am to 6pm. It is also clear that better alternatives to SMS credit are available to better-earning individuals, which is why it is less popular.