Anna Maria Andriotis
speaker
3,396 appearances
52 recordings
1 series
first heard Jul 2017
last heard Dec 2022
Anna Maria Andriotis’s voice in public audio — every appearance, attributed to the second.
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Appearances
Great to be speaking with you.
So these programs became popular really as a result of consumers having a lot of pent-up demand to spend, as well as being flush with cash for a variety of reasons.
A mixture of the government stimulus payments that went out during the early stages of the pandemic, an increase in household savings that was in part the result of
people pulling back on spending early on during the pandemic.
And what essentially has been perceived as several elements of these payment plans that are pretty consumer friendly with regards to how they allow people to split up their payments over time.
So the companies right now are dealing with a couple challenges.
The first challenge is that late payments are
or losses related to those late payments are rising.
So we've basically seen this playing out with some of the sector's largest companies.
When looking at a firm, for example, about 3.7% of its outstanding loan dollars that were held on the company's balance sheet
were at least 30 days late at the end of March, up from 1.4% a year earlier.
Increases also happen with regards to loan losses for both Afterpay and Zip.
So what this data is showing is essentially that some consumers that have been signing up for these plans have had a harder time keeping up with these bills, are falling behind, which essentially raises questions about
The sort of overall financial health of the people who sign up for these payment plans in many ways do tend to skew more towards consumers who have less in savings and who have subprime credit scores.
So there's questions around whether these figures, these numbers will continue to worsen.
In addition, another challenge that these companies are dealing with is something totally separate from
sort of consumer credit and the health of the borrower.
Essentially, the way that many of these companies originate new payment plans is by borrowing themselves.
Most of these companies are not banks, so they essentially rely on the ability to borrow from other lenders and investors.
And the loans that they have oftentimes involve a variable interest rate.
Showing 101–120 of 3,396 · page 6 of 170
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