Consumer credits show spectacular growth quarter after quarter according to figures from the Cream bank, to approach 190 billion USD in outstandings! Auto financing remains one of the driving forces behind the loan, particularly used vehicles.
Particularly scrutinized in 2019 in this year “post yellow vests”, the purchasing power of the French was not satisfied with government measures to have more free cubits: consumer credits also participated in the realization of many projects . After growing 5.1% in the first quarter and 5.7% in the second, they gained 6.7% in the third according to figures published by the Cream bank. In 2017 and 2018, annual growth was 5.9% (+ 5.1% in 2016). In total, outstanding consumer credit exceeds 187 billion USD. It is 50 billion more than five years ago.
Affordable rates at European level
Why such a dynamic? Lower rates. As in stone, consumer credit rates fell in 2019, although their average level remains above the conditions for financing a property. Average interest rates on revolving, overdraft and miscellaneous loans stood at 5.4% (-0.2 points compared to the start of the year), those on new depreciable loans fell to 3.5% (- 0.3 point compared to the previous quarter). Levels “close to the lowest historic levels observed since 2003 and lower than the average for the USD zone” according to the Cream bank.
Auto Credit Goes Up A Gear
The emergence of auto credit on the second-hand market is the other reason for this strong growth. A summary figure this observation quite obvious: + 147.5% in Q3! If we refer to data from the French Association of Financial Companies, the financing of used cars (car loan + rental with purchase option) had increased by 12.2% after three quarters. Figures that contrast with the financing of new cars (-0.5% over the same period)!
Meanwhile, over-indebtedness is declining
If this “overheating” of consumer credit encourages professionals in the sector to remain vigilant about the level of over-indebtedness of borrowers, the latter recalled in the columns of Lite lender their rigor in risk management. The Lagarde law of 2010 had strengthened information on consumer credit and ten years later, the number of over-indebtedness files continues to decrease: almost 20,000 less in 2019 at the end of November compared to the same period l ‘last year !