8th August 2018, Skopje – High costs for instant loans are going to be reduced. Pursuant to the legal amendments, prepared by the Ministry of Finance, total annual costs for consumer loans are limited to 55% of the loan amount. Annual costs were not limited previously, reaching even up to 500% of the loan amount. The amendments also cover small-value loans below EUR 200, which were not previously covered by law.

Deputy Minister of Finance, Shiret Elezi, had a meeting with the President of the Consumers’ Organization of Macedonia, Marijana Loncar, at the Ministry of Finance today, presenting the amendments to the Law on Consumer Protection pertaining to consumer loans agreements.

– We have made these amendments in order to protect the citizens, at the same time to reduce the risk of additional worsening of the situation of persons facing problems with loan repayment. According to the amendments, total loan costs are also reduced. Hence, total loan costs are limited to 55% or 5 times the 11% default interest. For comparison purposes, there was no limit before, hence providers of small-value and short-term loans charged twice or three-times higher costs than the loan principal.  For instance, for a Denar 12,000 loan for a period of two or three months, the citizens had to repay Denar 36,000, Deputy Minister Elezi said.

President of the Consumers’ Organization of Macedonia (COM) welcomed the Ministry of Finance’s initiative to amend the Law on Consumer Protection pertaining to consumer loans agreements.

– This amendment is of particular importance for all of us as consumers due to the fact that the annual rate on total costs for consumer loans is limited. What is favourable for the consumers is that the legal amendments provide for the Law to also apply to EUR 200 loans, which have not been regulated by this Law so far. The consumers are confused since these loans are most often advertised as interest-free loans, while the costs calculated are actually the interest itself.   Therefore, COM appeals for the amendments to be adopted as soon as possible, Marijana Loncar, COM President, said.

Wording of the Law was published on the Single National Electronic Registry of Regulations and all stakeholders can give proposals and make comments. Ministry of Finance will take all of them into account and will carefully consider all suggestions prior to submitting the Law to government procedure.

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