Banks, Estonia, Financial Services, Loan, Telecomunications

"Take a loan and your bank knows nothing about it," is how Bongabonga, a provider of small unsecured loans advertises its products, writes LETA.

Another SMS loan company Ferratum offers customers "cash in hand, not by bank transfer. The bank's does not know and you can use the money as you like."

Such schemes has been angering banks, not least since SMS loan companies are using the services of of postal offices of state postal company Eesti Post to pay our loans in cash.

Banks claim that such unsecured loans are not only unethical, but are also likely to increase the number of people with bad debts.

Banks have a policy that they treat customers who have taken SMS loans or who have a gambling habit less favorably than other customers.