Personal loans are still sharply down in the second quarter, by 27.8% over one year, announced Tuesday the French Association of Financial Companies (ASF), penalized by the reluctance of credit institutions for which its products are less profitable. The amount of these consumer credits not allocated to a particular good fell from 3.81 billion euros between April and June 2022 to 2.75 billion euros over the same period this year, a drop described as ” severe” by the ASF, after the -25.3% in the first quarter over one year.
These products are, since the start of the rise in central bank interest rates to counter inflation, much less profitable for banks and other players in this market, who have become more selective. “Despite the measures of monthly payment of the rate of usury, the balance sheet remains heavy for the personal loan”, observe the authors of the monthly study stopped at the end of June.
Already very high for this type of loan, the rate of wear and tear only changed slightly over the half-year, going from 21.04% on January 1 to 21.45% on July 1 for loans from an amount less than or equal to 3,000 euros. This ceiling rate, calculated by the Banque de France intended to protect the borrower against over-indebtedness, has since this year been updated every month and not every quarter.
With nearly 96.5 billion euros in outstandings at the end of March, personal loans represent almost half of consumer credit outstandings, according to the latest data available from the Banque de France. New car financing also started to rise again, by 10.5% in the second quarter, indicates the ASF, a “good performance (…) mainly driven by rental transactions with option to buy ( LOA)”.
The volume of total financing of new cars, 2.58 billion euros between April and June, says nothing on the other hand about the ability to repay borrowers. The ASF indeed pointed out on July 20 that even if the first unpaid bills stabilized, “they still persist in automobile financing”. All consumer loans combined, production is logically down in the second quarter (-4.7%), for a total of 12.19 billion euros in new loans. The ASF brings together some 260 companies in furniture and real estate leasing, factoring and other associated services.