FRANKFURT - More and more people in Germany are making purchases with 'Buy-Now-Pay-Later' loans, according to data released on Tuesday by SCHUFA, a major credit information provider in Germany, reported German news agency (dpa).
Now almost every second newly issued installment loan is for less than €1,000 (US$1,064), according to the latest SCHUFA data.
In 2023, the credit agency, based in Wiesbaden outside Frankfurt, recorded 4.35 million new contracts in this category. This is approximately 14 per cent more than in 2022.
Buying on credit is enticing for consumers, especially since the financing is often advertised as interest-free, explained SCHUFA board member Ole Schröder. He added more middle-aged consumers are making purchases this way.
Previously, small loans were primarily popular among younger people, according the data. But with the increase in online retailing, demand from middle-aged consumers has grown. The number of ongoing instalment loans under €1,000 among those aged 35 to 39, 40 to 44, and 45 to 49 increased by around 30 per cent in 2023 over 2022, the credit agency said in its Risk and Credit Compass report.
For years, Germany has been viewed by many outside of the country as an especially frugal place, where purchasing anything on credit is frowned upon. Many families have stories about their relatives in the 1950s, when the country was rebuilding after World War II, and how they stretched food, clothes and other items because money was tight. - BERNAMA-DPA