Consumer credit fell by 11.7% in 2020, the sharpest decline since the 2008 financial crisis. Revolving credit is down 15.3%.
A difficult year for consumer credit players
As the latest figures from the Association française des sociétés financières (ASF) show, consumer credit fell in 3 quarters out of 4 in 2020. During the spring confinement, it fell by 35.6%, and grew slightly during the summer, with a 2.6% increase.
Over the year as a whole, it fell by 11.7%. This is the biggest drop since the 2008 financial crisis, which led to a 13.3% decline in consumer credit in 2009. The rate of credit holdings fell to 25%, the lowest level since 1989, the year the ASF barometer was created.
After gradually returning to its pre-2008 financial crisis level, the consumer credit market is once again moving away from it. At 40.9 billion euros, production is down -8.9% on 2007.
An even sharper decline in revolving credit
Over the full year 2020, revolving credit collapsed, recording a decline of 15.3%, higher than in 2009 (-11.2%). Activity reached its lowest level for 26 years, with a total amount of 7.8 billion euros.
Revolving credit now accounts for just 19.2% of consumer credit production, compared with 37.1% 10 years ago. It was already on the decline before the start of the health crisis, recording a 4.5% drop at the beginning of the year. It collapsed in the spring, with a fall of 35.2%, and did not recover during the summer, unlike consumer credit.
In the third quarter of 2020, revolving credit fell by 9.7%, and by 12.3% in the fourth quarter.
Car financing also fell, down 10.1% for new cars and 7.3% for used cars. Affected loans fell by 22.3% for new cars.
On the other hand, with the French spending a lot of time at home due to confinement and curfews, financing for home improvements and household equipment rose by 8.7% in the fourth quarter. Over the full year 2020, the decline in this sector was limited to -2.1%.