Declining Growth in Individual Credit as Economic Factors Weigh on the Market

At the end of May, this credit -in interannual terms- registered a growth of 11.1% compared to the same period last year.

In February, credit to individuals grew, in interannual terms, 14.9%; in March, 13.1%; and in April, 12.1%. A sample of the loss of dynamism.

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Arturo García, postgraduate professor of Finance at ESAN, maintains that given the various financial and economic factors -internal and external- to which the country is exposed, loans to individuals are expected to slow down their growth in the remainder of the yearto gain momentum again in 2024.

“Consumer loans were the ones that grew the most last year. Moreover, the variable that in 2022 boosted the economy was domestic consumption, especially that referred to consumer credit. However, due to the higher global interest rates -higher financing costs-, the lower growth expected in the national economy, the global El Niño phenomenon and the social conflicts experienced since the beginning of the year, this sector is slowing down more and more. more, thus hitting the total credit of the people”details.

García adds that there is greater caution on the part of banks in granting loans to people due to the risks they foresee.

“However, given this event, people make use of credit cards, which are already approved lines. Therefore, at this point it should be noted that this is dangerous because clients will be exposed to high levels of indebtedness, which later translates into high levels of delinquency.”Garcia says.

Depending on how severe the impact of the global El Niño phenomenon is, he argues, credit growth rates could be negative – in the worst case. “In the optimistic field, we hope that by the end of the year, the central banks will begin to lower interest rates, which would boost this sector, and with it also the national economy”points out.

Consumer and mortgage credit

Within this segment of personal credit, consumer credit registered a growth rate of 14.9% compared to the same period last year.

The interannual growth rate of the rest of consumer loans fell from 14.3% in April to 13.1% at the end of May (S/ 79,249 million).

While the interannual growth rate of mortgage credit was 5.6% in May.

In addition, within the consumer segment, vehicle loans showed an interannual growth of 18.7% (19.3% was reported in April).

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