MMS credit to pay for money
MMS credit is increasingly becoming a way to pay for goods, unpaid bills, but it has not always been so, and not everyone uses MMS credit to pay for money, which is mostly respected by Internet users – there are about half of them in Latvia.
Short-term loan business in Latvia
The short-term loan business in Latvia officially started in 1895, when the statutes of the Riga City Lombard were established. What similar to pawn shops in the territory of Latvia could be found already a couple of decades before. During the First Republic, both valuables and household goods were pledged, which have not changed significantly now. A board member at pawnshop24, says that now most customers mortgage valuables and electronics, such as cell phones, but less watches and home appliances.
The closest to the MMS credit found in Latvia after the restoration of independence was the bank consumer credit. The amount associated with it was not 100-150 USD, which is more often taken for MMS credit, but 500, 1000 and more USD. Therefore, when they had some money problems, before the MMS credit and the “hourly credit” introduced by Money in 2005, Latvians turned to pawnshops or acquaintances.
Short-term loans among Internet users
MMS credit really came to Latvia in 2007 , and since then, MMS credit has become the favorite destination for short-term loans among Internet users in Latvia. Although no crisis was favorable to anyone, neither the people nor the lenders, there were not many restrictions on the operation of pawnshops. Pawn shops and short-term lending companies went through a period of crisis, with many entrepreneurs opting to set up their own pawn shops, which are still visible in the area around Central Station.
Although nowadays it is necessary to purchase a license for USD 50,000 to establish a pawnshop, most existing pawnshops simply “redirected” by circumventing the law and becoming “gold-buying boots” or simply boots that everyone knows about, but purely officially they are no longer pawnshops. Currently, there are 41 non-bank lenders officially in Latvia, including MMS credit companies (information retrieved on December 5, 2011), but the number of such buying points is unofficial – it can no longer be determined by statistics.