MEGA MARKETS SETTING UP AUTOMATED LOAN MACHINES

CHRIS O'LEARY

MEMPHIS, Tenn. -- Mega Markets here is among the first retailers to take a new twist on supermarket banking: the automated loan machine.

Four of the chain's 13 stores have recently begun offering loan services through automated machines located in store bank branches. The units, similar to the more familiar automated teller machines, have also been installed in supercenters owned by Wal-Mart Stores, Bentonville, Ark., and Kmart, Troy, Mich.

For supermarkets, the use of automated loan machines could spur even more customer traffic as consumers demand a wider variety of 24-hour services available from in-store banks.

A recent survey of 800 shoppers found that almost half, 47% of respondents, wanted their in-store banks to offer personal loans, and 40% said home equity loans were important. The survey was conducted by National Commerce Bank Services here.

Consumers can receive personal loans of up to $10,000 from the automated loan machines. Information, including Social Security and driver's license numbers, is entered on the machine's touch-screen and verified against data bases maintained by state and credit agencies.

After entering the requested loan amount and a proposed monthly payment, applicants wait for about 10 minutes to see if their loan is approved. When a loan application is accepted, the automated loan machine prompts consumers to sign an electronic pad and pose for a photograph by the machine.

Loans are issued in check form or are automatically transferred to consumer bank accounts. Bank officials said consumers who use the machines do not have to be members of the providing bank branch.

Many banks are charging the same rate for loans made on automated loan machines as those received through a traditional interview procedure with a bank official, analysts said.

The system is designed by Affinity Technology Corp., Columbia, S.C.