While consumer credit is experiencing a resurgence in France, what is the situation in Belgium?
According to the Banque de France, consumer credits are multiplying. Consumer credit has seen an increase of 6.4% in November. The monthly peak of amortizing loan production followed suit. During the same period, Belgium experienced a similar situation. At the end of November 2017, on an annual basis, outstanding loans grew by 6.4%. The pace has been intensifying for several months now, raising the total amount of credit to 169 billion. Consumer credit is multiplying, a pace not seen in a decade.
A Production Model in Full Swing
Consumer credits are multiplying. The consumer credit situation has evolved over time. It was once primarily driven by revolving credit, which is now centered on restricted uses with strict rules. Today, it is more driven by traditional amortizing loans. Unlike revolving credit, this credit model is set by determining a final repayment period from the start. This type of credit reached a monthly production of 5.5 billion euros in November 2017, which is a record high. The level had never surpassed 3.5 to 4 billion at the height of the crisis.
Consumer Credits on the Rise Amidst Economic Events
The economic sector has experienced a number of simultaneous events that have undoubtedly benefited consumer credits in Belgium. In addition to a renewed confidence among households, growth at the heart of the eurozone has also played in favor of this financial sector.
Another powerful driver from a purely French perspective: a significant increase in mortgage credits. Unlike the previous year, these are full-fledged real estate transactions, whereas in the previous year, there were many credit renegotiations.
Thus, thanks to all the mortgage credits contracted in 2017, the effects were immediately reflected in home improvements. But also in the purchase of essential equipment for the newly acquired home, favoring consumer credit in Belgium.
Finally, another sector is showing relentless dynamism: vehicle purchases either through lease-to-own agreements or amortizing loans.
A Dynamic Reconquest
For a long time, it was especially the specialized consumer credit providers in Belgium (often subsidiaries of traditional brands) that dominated this specific market. Initially managed by banks, particularly mutual banks. Now striving to reclaim this very lucrative market, they are benefiting from the drop in rates to revive this financing activity. This allows them not only to retain their clients but also to benefit from profitable margins.
