Greek Fin Min: Loans from credit brokers – What the red loans bill brings

Around the middle of October, the Ministry of National Economy and Finance is expected to submit the new draft law which puts order in the market for the management and collection of red loans.

After the irregularities, and especially with regard to the part of informing the debtors, the bill brings an upgrade of the information systems of the funds. That is, through a platform they will be able to update in real time. The ministry is expected to give the companies in question time to make the system adjustments related to the update.

The plan will also incorporate EU Directive 2167/2021, which entered into force on December 28, 2021 and must be adopted by member countries by December 29, 2023.

Finance Ministry spokesperson Mr. Tsapalos spoke about the credit brokers for the red loans outside the bank.

“Within the bill we presented yesterday to the cabinet, there is also a provision for expanding the operation of the so-called credit companies. We are talking about companies with mandatory headquarters in Greece, which will be very closely supervised by the Bank of Greece and have the ability to provide credits to citizens, natural persons and businesses, with specific conditions and obligations. They are not funds, they are incorporated entities based in Greece whose main purpose is to provide credit to natural persons and businesses. It’s an alternative way of credit in essence for households and businesses and they help them refinance the loans as well,” he initially said.

“Already in 2014, there are such businesses in Greece, but only for consumer loans. We, with the law we are bringing, enable such businesses to extend to the rest of the loans, with strict conditions, giving a solution to many people who do not have access to bank loans and are looking for an alternative way of financing. It is a competitive interest rate of the banking system. Otherwise the market could not function. Companies are flexible to provide credit to some businesses and natural persons who had payment problems in the past and joined Teiresias,” added Mr. Tsapalos.

Red loan management companies under close scrutiny: Obligations

Obligation of detailed information
No harassment
Fines up to €500,000 and license revocation
The bill with the improvements to extrajudicial
Cut up to 28%
Fixed interest rate of 3% for three years
Automatic acceptance of the applications of the vulnerable
Loans from non-banking organizations
Consumer, housing and business from credit brokers