The consumer credit market - Italy

Since 2020, the consumer credit market has shown signs of recovery after the initial impact of the Covid-19 pandemic, with Italy experiencing a significant growth in disbursements by +18.8% in 2021 compared to 2020, despite being -9.7% down from 2019 levels. The total disbursement to individuals in Italy amounted to 21 billion euros. The market rebound is attributed to factors such as an increased satisfaction with loan offerings, a strong recovery in car and motorcycle purchase loans boosted by eco-incentives, and a return to pre-crisis levels in sectors like furniture, appliances, and electronics. Digitization of processes has been key, as it has simplified credit access through web platforms and digital channels, with 61% of consumer credit volumes involving digital channels in Italy. However, the pandemic led to a contraction in 2020 with consumer loans dropping by -20% in April and -50% in June compared to 2019 figures. Demand drivers include total disposable income, propensity to consume, and propensity to take on debt, with the typical borrower in Italy being a man over 50 with stable work and at least 3 loans taken out. Related markets, such as for cars and home renovations, also affect consumer credit trends, with the used car and building renovation markets in Italy highlighting the link between credit and larger asset purchases..Consumer Credit Market Dynamics in Italy – A Thorough Exploration In Italy, the consumer credit market has shown signs of resilience and growth, especially in the wake of the gradual recovery from the setbacks caused by the Covid-19 pandemic. The recent uptrend is attributed to a few pivotal factors, not least the digital transformation that has redefined the accessibility of credit through technological advancements. Consumer credit, as a financial service, is primarily sought for the purchase of goods such as vehicles, electronics, and for household improvements. Specifically, vehicle purchases and home renovations are the leading causes behind consumer credit applications, indicating a substantial connectedness between the consumer credit market and the markets for automobiles and home refurbishments. The market has witnessed significant growth since 2015. After a period of slowdown during the 2008 crisis, the growth trajectory has turned positive, with a strong recovery in lending especially aimed at car and motorcycle purchases, along with sectors like furniture, appliances, and electronics, reaching levels reminiscent of the pre-crisis era. Annual financial disbursements in the form of consumer credit have reached between €20 and €25 billion. The Italian consumer credit market has also been bolstered by eco-incentives, which further invigorated the loan segment for vehicles. The digital landscape has played an essential role, making it easier for consumers to access credit services via web platforms and digital channels. In fact, in 2020, approximately two-thirds of Italians did their research online before taking out a loan, yet actual online loan subscriptions constituted a smaller percentage when compared with physical channels—a situation indicative of latent potential for growth in online financial services. Consumer credit demand in Italy is influenced by several factors, including changes in disposable income, consumption trends, and the households' willingness to incur debt. The propensity to consume and take on debt presents a significant insight into the market's potential. Looking into the willingness of Italian households to incur debt reveals that the overall household debt has approached €575 billion, with consumer credit accounting for approximately 15% of this amount. The average debt per household is comfortably above €20,000. A general observation shows that men over the age of 50, displayed a stable work situation, represent a sizeable portion of applicants for consumer credit. A large chunk of the credit applications is aimed at securing immediate liquidity or acquiring a vehicle. On average, consumers seek loans of just under €10,000, with a preference for amounts below €5,000. This mirrors the economic behavior of consumers who tend to seek loans not just for high-value.### Key Players Shaping the Italian Consumer Credit Landscape The Italian consumer credit market is a dynamic sector with several influential actors operating within its spectrum. These entities play a pivotal role in meeting the diverse financial needs of Italian consumers, offering a variety of credit products ranging from personal loans to purchases of consumer goods. The diversity and positioning of these key players contribute significantly to the vitality and growth of the market. #### Findomestic Banca S.p.A. Findomestic Banca, a leading name in the Italian consumer credit market, holds a significant market share. As a specialized financial institution, it's known for its comprehensive range of services, including personal loans, revolving credit cards, and various types of purpose loans. With a focus on customer satisfaction and competitive offers, Findomestic has established a strong presence and is often the go-to choice for many Italians seeking consumer credit. #### FCA Bank FCA Bank is an example of a captive bank, carved out of the need to facilitate purchases within the automobile sector. This bank is closely associated with the FCA group, offering financing solutions tailored to the purchase of vehicles under the FCA umbrella. Their specialized services make vehicle acquisition more accessible to consumers and are a testament to innovative credit solutions aligning with sector-specific needs. #### Agos-Ducato Agos-Ducato operates extensively in the Italian consumer credit space, offering a variety of financial products that resonate with consumer needs. Their portfolio includes loans, personal finance solutions, and credit for the purchase of consumer goods, thus catering to a considerable expanse of the market's requirements. Known for their flexible products and approaches, Agos-Ducato remains a formidable player in the market. #### Unicredit Unicredit's consumer credit services involve a broad spectrum of financial solutions. As a generalist bank, their approach to consumer credit includes personal loans and financing options that cater to a vast clientele. Their high participation in option and installment card-dominated financing underlines their significant stake in the consumer credit market. #### Compass Bank Compass Bank is yet another indispensable player in the consumer lending market. With its range of credit services that span from personal loans to motor vehicle financing, Compass Bank has carved out a substantial share of the market. Intuitive financial products and a client-oriented approach have helped Compass Bank secure its position as a key financial institution in Italy. The Italian consumer credit market is characterized by a blend of both traditional banking institutions and specialized financial intermediaries. Each of these actors brings a unique set of services, expertise, and innovations catering

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• Number of pages : 30 pages
• Format : Digital and PDF versions
• Last update : 17/08/2022

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