Payday loans and other subprime products are big business here in the UK and this is not likely to change anytime soon (assuming that no government laws or restrictions are imposed). Britain has become a hub for this type of business to thrive in for a number of reasons. What is critical is that there isn’t much of a barrier to entry for credit providers entering the industry and the demand is healthy due to banks and other mainstream lenders refusing to take on those with bad credit (or those with no borrowing history). The UK has even surpassed the United States in growth, that is where the industry spawned from.

The US laws tightened over the years and with strict APR limits and some overall bans in some states, it became difficult for most to turn a profit in such a financial climate. This is why many of the big names active locally are owned by US firms who moved here to a place that as noted has no such strict regulations in place. If you would like to know just which companies are US-owned, then you can check out this Previous Post that lists the majors. When it comes to global payday loans, in what other countries can you receive these products and just how popular are these markets?

Australia and Canada have each been notable locations, although they too have very tight laws in place. New Zealand has also been growing (247Moneybox have even setup camp there). Europe does look to be the next major target destination for many and Ferratum and Vivus have each been the early trendsetters across various Euro locations. Vivus are of course active in 13 countries that shows how well they have grown. As was referenced in a previous post here, they are very popular in Poland (Vivus PL) that is also where Wonga have now Ventured Into. This certainly looks to be one of the emerging countries for payday loans in 2014.

As I’m aware, Wonga have also been looking at taking on USA that will follow on from their recent entry into Spain. From studying various European areas, lending of any kind does tend to work differently and you have big banks are at the centre of most of the action. Consumer debt is almost non-existent in such countries with people tending to get by on what they earn from their jobs. No data exists on China and India that could potentially drown everyone if the supply and demand existed. Creating global payday loans would be a tricky task for even the biggest firms involved in the industry.

Other than the language barrier, getting the necessary licences may not be worth the trouble if the demand from the public simply isn’t there. On the flipside to this, the lack of competition is a major incentive to perhaps give a new location a try. It is clear that the UK sector has become overcrowded and difficult to make an impact in these days, particularly for industry newcomers. Overall, it does look like specific Euro countries may well see the next payday boom. In a future post, the objective will be to compile a list of the active lenders in each country where subprime lending is known to take place.