Consumer credit falls in France

TheAssociation Française des Sociétés Financières and French Banking Federation recently presented the 37th edition of the Household Credit Observatory. And this edition is marked by a record since it has had the lowest level of credit holdings by French households since the creation of the Observatory in 1989.

FACTS

• The Observatoire des crédits aux maisons (OCM) is based on a survey carried out at the end of the year among a large sample of French households. In 2024, it was possible to interview almost 13,000 households by post and to recover the detailed answers of 72.7% of the sample.

• The main lesson that the French association of financial companies draws from this new Observatory concerns the decline in the rate of ownership of loans by households in France. Only 41.9% of households currently hold credit.

• This rate is the lowest ever recorded by the Observatory, but above all represents a further decline in the share of households holding credit for the sixth consecutive year.

• In detail, the decline in consumer credit is particularly marked since it recorded a decline in the holding rate of 19% in 2024. The rate of holding of real estate loans was stable in 2024; 29.7% of households have a real estate credit.

• Overall, consumer credit output increased only slightly, by 0.4% in the fourth quarter, and by only 0.3% in the whole of 2024.

ISSUES

• Short-term explanations : The appropriations allocated fell significantly over the year by 8.6%. Buying a vehicle on credit suffers from competition from LOA or LDD offers. The appropriations for the renovation of housing also fell, with production falling by 6.4% in 2024.

• An ongoing rebound : The Association Française des Sociétés Financières and the Fédération Bancaire Française have nevertheless noted a rebound in the intentions to subscribe new credits in the 1st half of 2025, the appreciation of households on their financial situation has slightly improved. The fall in inflation and the fall in credit rates favour this increase. 85.4% of households say that their repayment expenses are bearable, so the intentions to subscribe to new credits go back. 3.1 per cent of households intend to purchase real estate credit and 3.7 per cent of consumer credit. The consumer credit market grew by +6.5 per cent in December 2024 compared to December 2023.

PERSPECTIVE

• The market trend was very different in 2018. At the time, the French Association of Financial Companies' credit production survey stressed a rebound of 11.6% of consumer credit in April compared to 2017. At the time, the French mainly used personal loans to finance the equipment of their home.

• Little has changed since today, 90% of consumer credit is used to buy home equipment, an automobile, a motorcycle, or to finance housing improvements.

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