Credit Managers Expect More Demand for Services

Credit Managers Expect More Demand for Services

New Zealand's credit managers expect increased workloads as climbing interest rates force consumers to reprioritise their spending.

New Zealand Credit and Finance Institute (NZCFI) president David Young said economic indicators signal tougher times ahead for consumers and lenders.

"We've just seen our fourth successive interest rates rise, too many people are spending more than they earn and the New Zealand dollar's meteoric rise has made imports cheaper, increasing temptation for some people to over commit themselves financially.

"These factors combined with an international credit rating agency's assessment of our housing market as the riskiest in the world means people will start feeling the pinch between now an the end of the year well before the traditional Christmas spend up," he said.

International credit rating agency Fitch Ratings recently released a report which described New Zealand house prices the most overvalued in the world.

Mr Young said in the current economic climate, the role of professional credit managers was vital to any business regardless of size.

"If debts aren't being repaid, the lender ultimately carries that load. Bankruptcies are a worst case scenario for both parties."

NZCFI predicts that consumers are most likely to fall behind in repayments for consumable items before the house for sale signs go up.

"Some people will be faced with tough choices in the near future. If mortgage repayments are a priority, the stereo, car or credit card repayments are most likely to fall by the wayside," Mr Young said.

Credit managers anticipate an increase demand for their services as businesses struggle to retrieve unpaid debts.

"Practitioners with the relevant skills and expertise have a better chance of retrieving debt for clients - whether working in-house or on contract. It is not good business for lenders or borrowers when people fall behind with repayments."

The NZCFI is the country's only official association of professional credit managers and, aims to contribute to a healthy economy by providing training opportunities and support for members.

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