"Just as non-bank credit for businesses made the previous decade, consumer non-bank credit will make the next decade. It is happening in the world, and will happen here too," Leumi Card Ltd. CEO Danny Cohen told the "Globes" Capital Markets Conference held in Tel Aviv today in conjunction with BDO Ziv Haft.
Cohen predicts that the growth in consumer non-bank credit will surge in coming years, mainly because of the availability of credit and the hunger of the credit card companies.
Cohen gave an example of the importance of consumer non-bank credit for Israeli consumers. "Take, for example, a customer who goes to a bank to ask for a loan and is told, 'We'll get back to you in 24 hours.' Instead of that, he can go online to Leumi Card's website, and get the loan immediately. That's the hunger of the credit card companies," he said.
There are 6.4 million credit cards in Israel, or an average of 1.5 cards per eligible person. 80% of eligible persons have credit cards. Cohen says that the market is growing steadily at 14% a year. In 2007-09, the number of non-bank credit cards rose by 51%, compared with a 5% increase in bank credit cards.
Israel's banks currently dominate the level of consumer credit. 91% of consumer credit, excluding mortgages, is bank credit, in contrast to other countries, where the bulk of consumer credit is non-bank. Cohen said, "In the UK, 65% of credit is provided by credit card companies. In ten years, non-bank credit in Israel will reach 50% market share. The growth rate is accelerating."
Published by Globes [online], Israel business news - www.globes-online.com - on May 5, 2010
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