Personal loans fell sharply again in the second quarter, 27.8% in one year, the French Association of Financial Societies (ASF) announced on Tuesday, penalized by the reluctance of credit institutions, whose products are less profitable.
The amount of these consumer loans not intended for a specific good fell from 3,810 million euros between April and June 2022 to 2,750 million euros in the same period this year, a fall described as “serious” by the ASF, after -25.3% in the first quarter for a year.
These products have been, since the start of the central banks’ interest rate hikes to counter inflation, much less profitable for banks and other players in this market, which have become more selective.
Already very high for this type of loan, the attrition rate only varied slightly throughout the semester, going from 21.04% on January 1 to 21.45% on July 1 for loans of less than or equal to 3,000 euro.
Car loans are on the rise
This maximum rate, calculated by the Banque de France to protect the borrower against over-indebtedness, has been updated every month since this year and not every quarter.
With around 96.5 billion euros in circulation at the end of March, personal loans account for almost half of consumer credit, according to the latest data available from the Banque de France.
The financing of new vehicles also grew again, 10.5% in the second quarter, indicates the ASF, a “good behavior (…) driven mainly by rent-to-own (LOA) transactions.”
The total financing volume of new cars, 2,580 million euros between April and June, says nothing, on the contrary, about the repayment capacity of borrowers. In fact, the ASF pointed out on July 20 that, although the first unpaid debts stabilized, “they still persist in the financing of automobiles.”
In consumer loans as a whole (personal loans, car financing, etc.), production logically decreased in the second quarter (-4.7%), for a total of 12.19 billion euros in new loans . The ASF brings together some 260 furniture and real estate leasing, factoring and other related services companies.
Source: BFM TV
