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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