Consumer credit collapses in 2020

Consumer credit was not popular in 2020, and for good reason: between confinements and various restrictions, the French have not really had the opportunity to spend. And that’s not all: they saved record sums, which sleep peacefully on their tax-free savings accounts and their other savings products: they therefore did not need a consumer loan.

Consumer loans fall almost as much as in 2009

The figures of the French Association of Financial Companies (ASF) published Monday, February 15, 2021 are final: the year 2020 was a horrible year for consumer loans. Over one year, their number fell by 11.5%, unheard of since… 2009. In the aftermath of the global economic crisis, consumer loans fell by 13.3% over one year, ASF recalls in its press release. In 2008, consumer loans reached an all-time high at over 44 billion euros.

In 2020, only 40.2 billion euros in consumer credits were loaned. The French have particularly turned away from revolving credits (-15.5% over one year), personal loans (-18.5%) and loans for vehicle purchases (-10.3% for new vehicles, – 7.3% for used vehicles).

An improvement in 2021 or not?

With only one quarter which recorded an increase, over one year, for consumer loans in 2020 (the third, at + 2.9%), it obviously seems that health measures are the main cause of the decrease recorded by ASF. In the second quarter of 2020, during the general confinement, the fall was even 35.4% over one year. And even the Christmas 2020 period will not have improved things, despite a gift budget that has significantly increased to more than 600 euros: the last quarter of 2020 saw consumer credits fall by 7.6%.

2021 is therefore likely to have some new unpleasant surprises in store: the year begins with travel restrictions and a general curfew at 6 p.m., not to mention the closure of the ski lifts and certain entire areas of activity. Confinement 3, it always threatens … which does not make you want to consume.

But credit institutions will have to deal with another threat to their business model: the savings accumulated by the French in 2020, which amounts to tens of billions of euros (more than 100 billion according to the OFCE). As much money that households will be able to mobilize instead of taking a loan, or even be able to use to close certain loans already contracted, and this as soon as the uncertainties about employment and the economic recovery are lifted.

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