We had left consumer credit with a little slack in the second half, but the sector is already rebounding. According to the latest figures published by the French Association of Financial Companies (ASF), production accelerates in July still under the impetus of the LOA (lease with option to buy).
A market that continues to recover
Admittedly, the month of July 2016 was ” marked by a contraction in activity ” (-4.4%), but the figures of the sector are nonetheless encouraging. Sign that the overall trend is positive: production shows a rise of 4.8% over the last 3 months. For the ASF, it is clear: ” the phase of recovery of the market initiated since 2015 continues “.
More than 30% increase for LOA
This is not really a novelty, but here LOAs are very strong. Last July, the sector literally exploded with a boom of + 35.6% over one year. The LOA? It is a financial solution alternating rent and possibility of acquisition. At first, you rent a property (a car for example) then at the end of the contract, you can return it or acquire it permanently (with the payment of the residual value).
While this business weighs less than conventional loans (676 million euros in July 2017, compared to 2,826 million euros), it has been showing an insolent progression in recent years, particularly in the automotive sector. The ASF’s figures are not fooled: the LOA auto posted an impressive rise of 41.3% in July. In comparison, LOAs for ” other materials ” increased ” only ” by 4.5%.
Classic credits are also rising
The variations are more anecdotal than those of the LOA (+ 2.7%). By type of credit, appropriated credits showed good results, driven in particular by the market for used vehicles (+ 22.1%). For the record, this loan must finance a specific good or service. The advantage is that if the property is defective, the borrower is protected: he will not have to repay his consumer credit.
The personal loan seems to start, him, a bad cycle. Activity fell by 3.5% in July, after -4.6% a month earlier (+ 3.3% in the first half). The personal loan is a consumer loan that can finance all types of projects (vehicle purchase, construction work, travel…), up to 75 000 € (the legal ceiling). This is a flexible solution, but there is a problem: if the good or service is defective or not delivered, you still have to repay your loan.
As for the production of revolving loans, it rose by 4.3%. This is a surprise because this consumer loan was at half-mast for a few years, due in particular to a stricter legislative framework (Lagarde law in 2010 and Hamon law in 2014). Is this the beginning of a return of activity?