Why PeoCredit Banks are so reluctant to engage in consumer lending

The banks will lend the money out to borrowers, charging the borrowers a higher interest rate and profiting off the interest rate spread. So there is perhaps nothing more important to a bank than the loans they make. Loans are the way a bank makes money. When loans go bad, it can be fatal to a bank. So most of the banks are oriented to give more and more consumer loans, to attract more costumers. ProCredit group has different approachs, it sets standarts in the finansical sectors and has priciples what guide of the ProCredit banks. These are the principles: transparency, a culture of open communication, social responsibility and tolerance, high professional standarts, a high degree of personal integrity and commitment. Based on these principles Procredit Banks decide don’t engage in consumer lending. In many cases, it has no purpose, people borrow costumer loans for fun, for primary needs and etc. Sometimes they do not understand their responsibilities and they don’t know what they afford. Customers borrow swiftly money from the banks, at that moment they are satisfied, but when they calculate and comes payment period everything change. They are dissatisfied and most of them blame the bank. Overlending creates an unstable environment in the country. Procredit banks are oriented for costumer needs, ensure that custumers fully understand the terms of the contracts they conclude with ProCredit. They Provide information to the customer because raise public awareness about incomprehensive finansical offers. For ProCredit banks Social responsibility and tolerance means to offer custumers good advice, Assess their economic and financical situations, their repayment abilities. ProCredit Bank is development-oriented commercial bank, aim to promote culture of seving and finansical responsibility. Based on the principles it provides to lend investment loans, whose needs are thoughtful understood by the clients. This is the direction that Procredit Bank has chosen is guarantor that it will have a long-term, satisfied and loyal customer. Such approaches are very important for the development of the country and sets an example for other companies to take social responsibility in addition to profitability.