Opportunities for Cooperation between Estonia and Finland

See the report of the Estonian Ministry of Foreign Affairs HERE

Unsecured SMS loans amounted to a billion kroons

In the last year, so-called SMS lenders granted unsecured loans for about a billion kroons.

Äripäev writes that the outstanding debt of customers of SMS lenders amounted to around EEK 300 million at the end of 2007.

SMS lenders themselves question these figures and claim that they are not doing so well are the media report.

“We need to work hard for our profit since we pay for the money that we lend and we pay a high price,” said Aaro Sosaar, CEO of SMS Laen, one of the largest SMS lenders.

“I think that the real market volume was between half a billion and billion,” said Helen Veski, CEO of Monetti. “Four large players account for around EEK 200 mln and the rest are very small players,” she added.

According to Veski, the four large players on the market are SMS Laen, Credit24, Raha24 and Monetti.

Market leader SMS Laen claims that it has issued more than 100,000 loans during its history. The company loan portfolio increased over 400 percent last year to EEK 82 million. During the year the company issued loans for EEK 250 million. In six month of 2008, the company has already issued loans for EEK 200 million.

Raul Paiste, CEO of MCB Finance Estonia that issues loans under the Credit24 brand, said that last year the company issued loans for EEK 117 million.

Raha24 issued last year loans for EEK 140 million. Of its outstanding claims of around EEK 40 million, about half is bad debt.

Analysts say that there are between 60,000 and 70,000 people in Estonia who regularly take out SMS loans. “This means that the loan volume could be about half a billion,” said one expert.

Combined profit of SMS lenders was EEK 40 million in 2007. All in all, over 20 companies are issuing SMS loans in Estonia.

Most SMS lenders charge up to 600 percent a year on two-week loans. Longer-term loans carry between 200 and 400 percent annual interest. Most loan amounts are below EEK 10,000.

Source: BBN

Unemployment decreased in the 2nd quarter

According to Statistics Estonia, in the 2nd quarter of 2008, the unemployment rate dropped to 4%. The unemployment rate was the highest in Northeastern Estonia and the lowest in Western Estonia.

In the 2nd quarter of 2008, the unemployment rate was lower compared to the 2nd quarter of the previous year (5%) as well as compared to the 1st quarter of this year (4.2%). The unemployment rate ranged from 2.4% in Western Estonia to 8.9% in Northeastern Estonia. The unemployment rate was last below 4% in 1992.

In the 2nd quarter of this year, unemployment decreased only on account of increasing inactivity, because the number of employed persons was the same as in the 1st quarter (657,000). Compared to the 2nd quarter of the previous year, the number of employed persons slightly decreased. 359,000 persons aged 15–74 were economically inactive (students, retired persons, homemakers, etc.) in the 2nd quarter of this year, which is 6,000 persons more than a year ago. Among inactive persons, the number of pensioners and persons inactive due to illness or disability grew most.

According to the data of the Estonian Labour Force Survey, the number of unemployed persons decreased to 27,000 in the 2nd quarter of 2008. According to the data of the Estonian Labour Market Board, the number of registered unemployed persons was at the same time 17,000, which is more than a year ago. The numbers of unemployed persons and registered unemployed persons differ, because not all unemployed persons register in the Labour Market Board. During the last two years, this difference has continuously decreased because, due to the increased number of services offered to the unemployed by the Labour Market Board, more unemployed persons have registered.

Unemployed and registered unemployed persons, 1st quarter 2003 – 2nd quarter 2008

 

In earlier years, the main reason for not registering was the opinion of the unemployed that no suitable job was available in the Labour Market Board. During last years this opinion has changed. In 2005, 42% of the unemployed persons not registered in the Labour Market Board pointed out this argument as the main reason for not registering, but in 2007 — 29%. The main reason mentioned last year was that registration was not necessary as people believed they could manage by themselves (33%). More and more frequently a job is got through friends and relatives. In 2005, 38% of jobs were got this way, in 2007 even 49%.

Unemployment rate is the share of the unemployed in the sum of employed and unemployed persons. The estimates are based on the data of the Labour Force Survey. Statistics Estonia has been conducting the Labour Force Survey since 1995 and every quarter 5,000 persons participate in it. The Labour Force Survey is carried out by statistical organisations in all European Union Member States on the basis of harmonised methodology.

Source: Statistics Estonia

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