Will more consumer loans be approved as a result of the less-stringent rules? Shutterstock

Poland’s financial regulator, the Polish Financial Supervision Authority (KNF), has presented new draft amendments to its “Recommendation T” which regulates banks’ consumer loan activities. If passed, the new, less-restrictive rules would make it easier for banks to make consumer loans.

There are several changes, but one of the most important is the elimination of the requirement for banks to check the creditworthiness of a borrower in the case of small loans. Also, banks will not be restricted from lending to those who make less than the average wage and whose loan payments already make up 50 percent of their monthly salary.

The rules are aimed at slowing down dropping consumer-loan figures, and reducing the number of people who would look to a more risky “parabank” – like Amber Gold, whose collapse over the summer brought scrutiny to Poland’s non-bank lenders – for such loans. But will these new rules be effective?

“I would not expect a boom,” Przemysław Kwiecień, chief economist at X-Trade Brokers, told WBJ. “We are in a slowdown, delinquency rates are on the rise, the supply of capital is tight so banks will think twice before taking on higher risk; such regulations usually matter during an expansion – especially in a late phase of an expansion, when some brains get hot and need to be kept in check,” he added.