Where and for what credit – banks and parabanks

The realities of the free market economy mean that financial services for economic entities must be multifaceted. The basis for this service are commercial banks, which are integral components of the financial sector and at the same time strive to maintain autonomy in the system.

Banking institutions are entities with high capital


Experience and wide access to market information, thanks to which they can make a continuous allocation of capital. Through such activities, they stimulate the economy’s processes and fuel the market situation. The macroeconomic environment tends to undergo constant transformation, which is why commercial banks have highly developed capital flow networks.

The offer of banking products is shaped by low interest rates and prudential requirements. For this reason, customers are not interested in saving, which is why banks are recording a decrease in the number of deposits. To counteract the outflow of deposits, credit institutions are forced to raise interest rates on savings accounts at 3.5-4.0%.

Progress to education through advanced education


The media and the Internet contributes to greater awareness and knowledge. Bank customers are increasingly demanding from banks both in terms of access to various banking services, ensuring security as well as accessibility, speed, quality of services, transparency, compliance with legal regulations and ethics). Price competition ceases to be the most important attribute on the banking services market. The client, and more precisely satisfying his needs becomes the most important. The diversification of the service portfolio and the complementarity of the offer give you a product advantage.

The financial services sector is also a place of activity for companies that offer loans from their own resources. In addition, they have investment and savings products.

These entities are called parabanks (parallel banking, sng. Shadow banking). Parabanks do not need a license or license for their activities. They are also not subject to financial supervision and the capital entrusted to them by clients is not covered by any protection.

The development of parabanks falls at the beginning of the 21st century. A steady increase in the number of such financial entities has been observed since 2002. It is estimated that the value of the global parabank system is around EUR 50 trillion and accounts for 25-30% of the entire financial system. In the US, the percentage of participation is even higher and amounts to 35-40%.

Another trend in modern lending is the phenomenon of crowdfunding


Peer to peer, i.e. online banking, enabling the granting and taking of loans from other website users. In practice, the differences between loans and borrowings are blurred, and consumers use these terms interchangeably. It is worth noting that peer-to-peer “horizontal” loans are granted by an entity with financial surplus to an entity seeking cash. The parties agree directly on the loan terms.

Potential borrowers must convince lenders of their creditworthiness. A characteristic feature of crowdfunding is the low interest rate on the loan, and the portal makes profits from the fee for services rendered. As in the case of parabanks, online banking processes are not subject to supervision or legal regulations, just like traditional banks.