In 2015, the household loan holding rate finally stabilized (46.5% of households have one), after six years of continuous decline. It is in particular consumer credit which is showing good health, and allows this overall stabilization of the loans granted, unlike the mortgage loans in decline. For what purchases do the French use consumer credit? What forms of consumer credit are preferred? Here is the detail.
Strong demand for consumer loans in 2015
Households have increased their use of consumer credit, well beyond what they envisioned at the end of 2014.
Faced with falling demand for new mortgage loans, despite historically low rates but sometimes complicated access to housing, consumer credit is in good health. The consumer credit holding rate stood at 26.0% in 2015.
How to explain this renewed interest in consumer loans?
Thus, in September 2015, after five months of stability, household confidence reached its highest level since October 2007, ie before the international economic and financial crisis of 2008, the scope of which greatly destabilized the demand for loans.
As explained in one of our news, the French have found a positive vision of their financial situation, their savings capacity, and have improved their perception of the future, and in particular the risks of inflation or rising unemployment. As many indicators which, once back in the green, release the desires of projects of the households.
Consumer projects that had often been shelved in the past could again appear to be feasible and new projects were considered by households.
- 14% of consumer credits are used to buy a car or a motorcycle;
- 6% of consumer loans are used for the purchase of household goods and 3.8% for improvement works;
- 2.7% of consumer loans are used for current expenses, while 1.1% is used to… pay taxes!
Revolving credit down sharply
What forms of consumer credit did the French prefer in 2015?
Unsurprisingly, loans taken out directly with a bank account for most of the consumer loans granted.
Households are increasing their use of consumer loans taken out with a bank or a credit institution.
These account for 18.1% of total households (and 38.9% of households alone with at least one loan), compared with 17.2% in 2014. In parallel, the use of revolving credit or back-to-back offers payment cards offered directly at the point of sale.
The share of cards (store, supermarket or credit organization) fell to 4.4% of total households, for the first time below 5%. A figure that should be compared to the 12.2% observed in 2005. Decrease also for loans signed at the point of sale, owned by only 5.7% of French households, against 5.8% a year earlier, and 7.4% in 2009, the highest point in the past 15 years.
How to explain this disenchantment for these forms of consumer credit?
The effects of the application of the Lagarde and Hamon laws seem to have had a lasting impact on the way credit is used. With a regulatory environment that aims to strengthen consumer information and protect them from products that can lead them to a tense financial situation, habits are changing.
“ The distribution of store“ cards ”has been declining since the end of the 2000s, while in 2008 9.6% of households still used this type of financing (18.3% of households with credit only (s) )) ”Specifies the survey of the Household Credit Observatory.