In Europe, over 50% of those looking to access a loan seek assistance from an expert. In Romania, the percentage stands at 25-30%, increasing compared to previous years but still significantly lower than the European average.
This is not surprising, considering that the brokerage industry in Romania was only regulated by law in 2016 and is still a young industry. Most people looking to obtain a loan are unaware that they can receive specialized help by collaborating with a credit broker, and that this service is entirely free. If they have heard of this possibility, they may have some reservations about starting such a collaboration.
Next, we will explore the role of a credit broker, how this profession has evolved in our country, and why the services of brokers are free for clients.
Who are credit brokers in Romania?
Essentially, a credit broker is an intermediary who is well-versed in the range of banking and non-banking financial products available in the market. Their goal is to assist you in obtaining the right credit for your needs under the most advantageous conditions.
In Romania, the activity of credit brokerage was regulated by Emergency Ordinance No. 52/2016, under EU Directive No. 17/2014. One of the main objectives of this ordinance was to ensure a higher level of consumer protection in credit contracts – a legislative framework that was long overdue at that time.
According to this law, only individuals with experience in the financial banking sector and/or higher education in the field can become credit brokers. Otherwise, they cannot be authorized through registration with the National Consumer Protection Authority (ANPC) and cannot mediate high-value loans, such as mortgages.
Currently, many credit brokers are former bank employees who have chosen to dedicate themselves to this activity as independent professionals.
How does a credit intermediation company work?
As the range of financial products has become increasingly diverse and complex, the need for specialists in credit intermediation has grown. Although late, the regulation of this industry in Romania has led to the adoption of more consistent, transparent, and secure practices for all parties involved.
As a result, in recent years, the number of people choosing to collaborate with a credit broker has significantly increased, both among financial institutions and individuals. The demand has also led to an increase in the number of professionals who choose to establish their credit intermediation firms or affiliate with existing ones through franchising.
To operate, a credit intermediation firm needs accreditation, which is transferred to the firm's brokers. In other words, brokers must be authorized to organize themselves as a franchise of the respective company and serve their clients.
Although they have autonomy in organizing their activities, by affiliating with a company, credit brokers enjoy multiple advantages: a well-established infrastructure serving the client, strong partnerships with financial institutions, and an extensive network of contacts within the banks' headquarters and branches.
Due to their affiliation with such an infrastructure, brokers can gain instant access to numerous credit offers, as well as assistance from a legal and/or processing department, streamlining the process of preparing and approving a credit application for their clients.
Why are the services of a credit broker free?
In the absence of early regulations, the activity of credit brokers faces skepticism from people that this service delivers what it promises. Another reason is that credit intermediation does not entail any cost to clients, which can raise suspicions – on the principle of 'if it's free now, I'll surely pay later.'
In reality, credit brokerage services are entirely free for consumers. Furthermore, in Romania, brokers are prohibited by law from charging any commission to clients. Why are brokers not allowed to charge clients? Brokers provide services equally for clients and the banks and non-banking financial institutions in their portfolios. By bringing eligible clients and preparing the necessary documentation for obtaining loans, brokers save banks from additional personnel costs.
With an increasing array of offers, banks, and non-banking financial institutions need this alternative sales channel to attract clients. In turn, clients need support in navigating the maze of options and making a responsible choice of the most suitable credit offer – a need that underpinned the legislative adoption of free brokerage services for consumers.
The role of brokers in the credit intermediation market in Romania is becoming increasingly essential, and the level of trust in their services is also growing, along with the adoption of more transparent practices.
Currently, a credit broker can offer you valuable assistance at no cost. If you are looking for a financing solution for the purchase of real estate or need a loan, collaborating with a credit expert can be a safer and easier way to obtain the right credit.
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