REX: Consumer Lending Still Popular in France
Every month, the French association for financial companies (Association Française des Sociétés Financières – ASF) releases their survey on credit outstanding. In April, strong increase has been observed as consumer lending witnessed a +11.6% surge (vs 2017). This growth relates to both personal loans and car loans.
As they conducted their survey, the ASF interrogated 280 specialised institutions. The result shows that more and more French people resort to consumer credit lines so they can buy home appliances and furniture. In fact, credit subscriptions for furniture and home appliances increased by 9.7% in April, vs April 2017.
The automotive market sees progress too: lease-purchase offers started to become popular. In April 2018, the market for credit offers applied to second-hand cars grew by 22% (vs 2017); the proportion assigned to new cars increased by 14.5% over the same period.
The number of personal loans, for its part, has increased by 14% vs April 2017.
Comments – Consumer credit: easier used to face unplanned contingencies
French people have been relying more on consumer credit lately, as highlighted by the average amount spent: €8,585 (according to Cofidis). In the ASF assessments they mostly resort to personal loans to buy home appliances/furniture (Cdiscount Location, for instance, already proposed long-term rentals for home appliances).
In the meantime, car loans have been particularly popular, and financial institutions understood this well. Some do not hesitate to partner with car industry-dedicated FinTech companies to introduce new offers (ALD and Drivy, for instance). Other, more conventional companies, including BPCE, are aiming for the Lease-Purchase market.
This trend grows EU-wide. According to a study by Cofidis with the YouGov institute in June, British people are most likely to rely on credit offers, with €3,468 in outstanding credit per capita, vs €2,267 in France (ranking 4th). Financing home appliances also is the main reason for borrowing money in the UK.