Padded Pockets to the Rescue.docVIP

Padded Pockets to the Rescue 　　Look to Consumer Finance Companies for Economic Hope 　　 　　Upside, Downside 　　 　　Consumer finance companies are distinguished by being able to offer unsecured loans to individuals for the purchase of consumer durables, without taking deposits from the public.Real estate and automobiles don’t fall into the consumer durable category, but home appliances, tuition for education, and expenses associated with travel and wedding ceremonies are covered by this line of credit. The spending limit may be capped at five times the borrower’s monthly income. 　　The first batch of these companies will run on a trial basis in Beijing, Shanghai and Chengdu. The Bank of Beijing Consumer Finance Co., Ltd. announced its official establishment in March 2010 and has set up its first counter at Dazhong Electronics’ CCTV Tower outlet. How swiftly this new line of credit will be adopted by consumers still remains to be seen. 　　Certain kinds of consumers see benefits. Xi Jingjing works in a PR firm in Beijing. Though blessed with healthy earnings, she invests so much in her wardrobe she has a tough time accumulating any savings. So Xi looks on consumer financing as a godsend, and plans“to use the loan to purchase a television set as soon as their doors open.” Xi says, “I consulted with banks about the possibility of getting consumer loans before, but balked at the long approval process a bank loan usually takes. By contrast, loans from financial firms with this new mandate will be available to clients within an hour of completing the application.” Xi believes the consumer loan issued through a special finance firm is a viable way for young people to manage their personal finances, but admits, “Once I take out a loan, I have to spend less on clothes until Ipay off the loan.” Young public servant Cui Kai is also positively disposed towards consumer financing. “My income level does not qualify me to apply for a credit card at present, so I expect the cons