Despite the economic recovery, the revival of consumer credit is slow to materialize, and the deterioration in the health situation leaves room for doubt as to its development over the coming months. Consumer credit activity fell by 4% in France in the third quarter of 2021 compared to summer 2020, according to the latest activity figures published by the French Association of Financial Companies (ASF), which brings together professionals in the financial sector. sector. Estimated at 11.3 billion euros at the end of September, the quarterly production of new loans is also down by 1.5% compared to the same period of 2019.
Certainly, over the first nine months of 2021, activity rebounded strongly (+ 13.6%), but the consumer credit market still remains below its pre-crisis level, says the ASF . From January to September, new loans granted were down 1.2% compared to 2019. In 2020, consumer loan activity had already fallen by 11.7% over one year, thus recording its sharpest decline. since 2009 (- 13.3%) due to the coronavirus crisis.
Loans to improve your habitat
The mixed third quarter reveals a contrasting situation according to the types of loans. The amount of personal loans, which by definition are granted without specific allocation, fell slightly (-0.7%) in the third quarter compared to summer 2020. “Compared to the pre-Covid situation, activity is struggling to regain its volume”, indicates the ASF. At the same time, new passenger car financing continued to decline sharply.
Conversely, the revolving credit market (“revolving credit”), which should be used with caution, has remained particularly dynamic, as has that of financing dedicated to improving housing and property. household equipment, as well as used car rental credits with option to buy.
As a reminder, consumer credit concerns loans between 200 euros and 75,000 euros, excluding the purchase of real estate, and the repayment period is greater than 3 months.
The French, European champions in underwriting
According to a pan-European study conducted by Younited, the 100% digital consumer credit specialist, the French are “The champions of consumer credit in Europe”. The survey was carried out online in July 2021 with the MixFactory research institute in Italy, Spain, Germany, France and Portugal on a sample of 1,000 people per country. Thus in France, 84% of borrowers questioned have already taken out three or more loans during their lifetime. This is more than neighboring countries, where this proportion reaches 72%.
One in two French people has even taken out more than five consumer loans. “As such, the French market is more dynamic than its European neighbors: in Germany, 46% have taken out 5 or more loans, and in Italy it is only 34%. “, emphasizes the study. The purchase of equipment concerns 76% of the reasons for borrowing. The purchase of a car, the financing of development or renovation work, the acquisition of goods for the house, and the realization of a life project come first in the use of consumer credits.
In this context, the loan aims rather to improve comfort and quality of life and the amount varies mainly (68%) between 3,000 and 20,000 euros. Only 17% of those surveyed borrow urgently for cash flow reasons, allowing them to cope with the vagaries of life. In this case, the majority of them borrow less than 3,000 euros.
Another lesson: The French rather use a traditional bank for the financing of projects exceeding 5,000 euros (purchase of a car, renovation work) and rely on specialized credit institutions for smaller-scale projects of the order of
3,000 euros (financing of household equipment or variable cash flow requirements).
Typical profile: over 50, a stable situation and up to 5 credits
Among the people who took out a loan during the last 12 months, the profiles of 40 to 60 years are the most represented. Three out of four borrowers report having a stable situation in their personal and professional life. Compared to 2016, more borrowers even report an improvement in their professional stability. Consumer credit is thus increasingly seen as a payment facility.
In a digital-driven market, two out of three borrowers say their projects were funded in less than a week, up from 28% in 2016. 70% of equipment and cash loans are approved in less than a week except for more complex projects.
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