The French association of financial companies has published its monthly report on the distribution of consumer loans in France. After a sharp increase in the production of these loans over the past few months, demand is starting to drop.
Buoyed by the constant fall in interest rates, the distribution of consumer loans in 2016 only increased. French households took the opportunity to buy a new automobile , carry out renovation work in their homes or acquire certain household equipment. According to figures given by the Lite Lenders during the 2016 balance sheet, 47% of the consumer finance that was subscribed was intended to finance a new or used car.
According to ASF statistics, this trend seems to be deteriorating at the start of 2017 , especially in February. Indeed, the production of credits allocated to a specific purchase recorded a decrease of 5.5% in the month of February compared to the month of January. This change can be explained by the current economic situation in France and the slight increase in the rates allocated to bank financing (consumption and real estate).
The slowing down of the dynamism of consumer credit can be explained by the increase in the banking scales and the tightening of the conditions of granting . It is becoming less and less attractive to take out a loan today compared to the terms put in place a few months ago.
Despite the drop in February, consumer loans are still popular in the first quarter of 2017. In total since January, this type of loan increased by 6.2% despite the slight increase in interest rates. This increase is attributable to the dynamism of the automotive market in France since it is the acquisition of a car that encourages debtors to request financing.
Despite the revaluation of the scales, the conditions of access to bank financing remain very advantageous and allow borrowers to get into debt at a lower cost to buy a consumer good or simply finance a particular service.
Either way, whether it’s consumer credit or home loans, market players are optimistic for 2017. The banks’ commercial objectives having been raised after a successful year in 2016, the conditions remain advantageous for many households.