Over-indebtedness continues to grow in France

The Bank of France has just published its latest Banking Inclusion Observatory (BIO) for the year 2024. In this way, it has gone on to a recurring and annual exercise which should identify developments in financial inclusion in France. And this new edition is once again marked by a clear assessment of the increase in over-indebtedness in France.

FACTS

• Since the end of 2023, the Bank of France has found that the total number of persons overdebted and registered on the national credit-repayment incident file (FICP) has decreased over the last 10 years, but the trend has been rising again over the last two years.

• The Bank of France points out that mini loans and split payment offers pose a particular risk to the most vulnerable customers. It therefore recommends systematic consultation of the IFCP by all actors before a credit is granted.

• The Observatoire de l'inclusion bancaire 2024 specifies that 134,803 cases of overindebtedness were lodged in France in the calendar year 2024, representing an increase of 10.8% over 2023.

• 4.6 million financially fragile clients were identified over the period, 6.3% more than in 2023.

ISSUES

• Highlighting continuous growth : This new observatory follows the Publication the monthly barometer of financial inclusion, which, in December 2024, already reported the rise in over-indebtedness in France. The reasons for this were then inflation and the national and international political crisis.

• Identifying Responsibilities : Beyond the economic situation, the Bank of France today clearly underlines the responsibility for the increasing distribution of products such as mini loans and split payment solutions within the economy. It also states that these offers pose a particular risk to the most fragile customers, despite their role in financial inclusion.

PERSPECTIVE

• Microcredit stocks exceeded EUR 2.1 billion by the end of 2024, according to the figures put forward by the Banque de France.

• Today, however, the situation is particularly strong for the activities of BNPL and the actors offering this type of offer in Europe. The situation in Klarna and its Positioning This is an example of this pressure. The Swedish BNPL giant now prefers to ensure its expansion in the United States, a much more permissive market.

• Indeed, while'like EuropeUnited Kingdom hardened The US Bureau of Consumer Financial Protection (CFPB) has the tone against the BNPL last May. announced do not give priority to the application of the sanctions arising from the Z Regulation. However, this regulation equates BNPL with credit card issues, imposing similar obligations on them.

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