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Summary of our market study
The French consumer credit market has been confronted with rising interest rates, leading to a stabilization of outstanding consumer credit at 210 billion euros in September 2023.
Consumer credit market trends
The consumer credit market in France is influenced by several factors, such as changes in purchasing power, interest rates and the digital evolution of financial services.
Total consumer loans reached 210 billion in September 2023. However, the rise in interest rates in 2023 led to a pronounced drop in growth rates for consumer credit production.
The automotive sector has largely contributed to this slowdown, with car registrations expected to fall by between 10% and 14% by 2022.
On the digital front, the market is undergoing accelerated digitization, as evidenced by the success of players such as Younited Credit.
Amortizable loans account for some 65% to 75% of outstanding loans. Leasing has fallen by 5-6%.
The profile of borrowers is diverse: 30-35% have a comfortable standard of living, while around 15-20% are consumers facing budget constraints. Younger borrowers, particularly those in the 20-30 age bracket, are more active on the market.
Sluggish growth in household purchasing power, reflected in final consumption expenditure, is driving the willingness to take out consumer credit.
The 20-30% increase in self-employed workers between 2003 and 2017, presents new challenges and opportunities to meet the needs of this emerging workforce category.
Sector players:
- Network banks, pillars of consumer credit, Crédit Agricole, LCL, Crédit Mutuel, BNP Paribas, La Banque Postale, HSBC, Société Générale.
- Online banks: Boursorama Banque, Axa Bank, BtoBank, HelloBank !, My Money Bank, Younited Credit, Orange Bank, Fidor Bank
- Specialized subsidiaries of major banks: Cofidis, BNP Paribas Personal Finance (Cetelem), Crédit Agricole Consumer Finance (Sofinco), Financo, Natixis Financement, CGI Finance
- Affiliated financial services of retail companies: Carrefour Banque et Assurances (Carrefour), Oney (Auchan), Cora Banque Revillon, Banque Casino (Casino)
- Captive finance companies of major automakers.
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Summary and extracts
1 Market overview
1.1 Definition and scope of the study
A consumer credit is a loan granted by a financial institution, directly or through a merchant, to a private individual acting for non-business purposes. Worth between €200 and €75,000, it is used to finance the purchase of consumer goods (furniture, computers, cars, etc.) with the exception of real estate.
There are several forms of consumer credit. They operate on two principles:
- the credit can be allocated to the purchase of an item determined at the time the contract is taken out (car, household appliances, travel, etc.). In this case, the credit obtained must be used solely to pay for the good in question;
- the credit may be unrestricted. In this case, you can use the sum borrowed as you wish, whether to purchase a consumer good or any other service. Personal loans and revolving credit fall into this category.
The French consumer credit market is growing
After significant growth since 2015, boosted by falling interest rates, the sector is going through a difficult period in 2023 due to rising interest rates. Outstanding consumer credit stabilized at 204 billion euros in September 2023, but growth rates in consumer credit production have fallen considerably. The problems faced by the automotive sector, one of the main customers of consumer credit, are exacerbated by a 12% drop in the number of cars registered in France by 2022, contributing to the challenges facing the sector. Falling household purchasing power due to inflation is having a negative impact on demand in an already struggling market.
The market is characterized by accelerating digitalization, manifested not only by the digital transformation of existing players, but also by the emergence of a growing number of FinTechs. The success of Younited Credit is indicative of this transformation of the sector.
1.2 Growth in the European market
Consumer credit markets are not uniform across Europe. The use and forms of loans are determined and evolve by socio-economic factors that can differ from country to country. For example, Germany is known for its debt-averse consumers, while in the UK or Turkey, it is more acceptable to hold large revolving ...
1.3 The French market: in difficulty as interest rates rise
In September ****, total consumer loans amounted to *** billion euros . This sum has risen steadily since ****, although growth has slowed in recent years. Outstanding consumer credit refers to the total amount of credit issued by financial institutions on a given date and not repaid. It is therefore a stock. Outstanding consumer loans France, ...
1.4 The Covid-19 effect
Decline in purchasing power
In the second quarter of ****, real gross domestic product (***).
As a result, consumer credit production plummeted in ****, peaking in May with a **% drop in consumer credit production by specialist institutions. However, a recovery seems to have begun in August, with a *.*% rise in loan production by specialist ...
2 Demand analysis
2.1 Borrower profile
According to a **** survey, it appears that **% of borrowers are consumers with a comfortable standard of living, who wish to indulge themselves and are adept at "coup de coeur" purchases. Rational consumers represent **% of those surveyed, and are those who wish to benefit from financial assistance for large, well-considered purchases. In ...
2.2 Microeconomic determinants of demand
The graph shows the evolution of the reasons for using consumer loans for different categories of goods between **** and ****. Here are some observations: *. Household equipment (***): - A downward trend has been observed since ****, indicating a gradual decline in the use of the loan for the purchase of home equipment goods. The ...
2.3 Macroeconomic determinants of demand
Purchasing power, consumption and savings rates Changes in household purchasing power have a major influence on household consumption, and therefore on their willingness to take out consumer credit. Since the **** crisis, purchasing power has evolved slowly, and growth has slowed. In particular, the sharp rise in the proportion of pre-committed expenditure ...
3 Market structure
3.1 The value chain
There are several stages in the consumer credit production process:
Design and marketing involve identifying targets, defining offers and developing sales networks. Granting and risk policy involves establishing selection criteria, assessing risk and segmenting the profiles of potential borrowers. The underwriting and acceptance stage involves creating the file, validating it and ...
3.2 The main players
The players in the consumer credit market are therefore highly diversified. The main players include
Network banks: Crédit Agricole, LCL, Crédit Mutuel, BNP Paribas, La Banque Postale, HSBC, Société Générale Online banks: Boursorama Banque, Axa Bank, BtoBnak, HelloBank!, My Money Bank, Younited Credit, Orange Bank, Fidor ...
3.3 Digitizing the market
According to a study by Roland Berger, one of the biggest challenges so far is digital transformation issues such as Big Data, digital contracts or new identification technologies. Over **% of those surveyed believe that digitalization will be the most important technological trend in the years to come.
The survey questioned senior ...
4 Offer analysis
4.1 Offer typology
There are many different types of consumer credit. The table below gives an overview of the main offers and their characteristics.
Source: ****
In addition, offers differ from one consumer credit issuer to another, for example :
Cetelem offers an APR starting at *.**%, for a loan of €**,*** over ** months Sofinco offers a fixed ...
4.2 Breakdown of credits by category
Amortizable loans are the most widespread form of consumer credit, accounting for almost **% of outstanding loans in ****. They enable borrowers to spread the repayment of capital and interest over a long period. They are followed by revolving credit (***).
Breakdown of outstanding consumer credit by type of credit France, ****, in Source: ****
Leasing, ...
4.3 Consumer credit interest rates
Aftera period of steadily falling interest rates between **** and January ****, there was a sharp rise in **** and ****, as shown in the graph below. Consumer credit interest rates have risen significantly over this period. Interest rates on revolving loans rose by *.* points between January **** and September ****, while those on amortizable loans increased ...
5 Regulations
5.1 Regulations
In France, a number of laws aim to achieve a better balance of power between professionals and consumers, and guarantee certain rights for consumers: the right to information, the right of withdrawal, the right to early repayment, the right to suspend repayments, etc. [***]
The Lagarde Act of July *, **** comprises several ...
6 Positioning the players
6.1 Segmentation
The table below provides a non-exhaustive overview of the main types of player.
- Younited Credit
- Société Générale
- Cetelem
- Crédit Agricole Consumer Finance
- Carrefour Banque
- RCI Bank (Groupe Renault)
- Alma
- Sofinco (Credit Agricole Consumer Finance)
- Cafom
- Aptimiz
- Holosis
- Damartex group
- Azuvia
- Sygma Banque (BNP Paribas)
- My Money Bank (GE Capital)
- CGI Finance
- Créatis (Cofidis)
- FLOA Bank (BNPParibas))
- Oney
- CFCAL (Crédit Foncier et Communal d'Alsace et de Lorraine)
- Franfinance (Groupe Société Générale)
- Pledg (Credit Agricole)
- Cofidis France
List of charts presented in this market study
- Annual growth in consumer loans to households
- Outstanding consumer loans
- Growth in household consumer credit
- Percentage of households with consumer credit
- Breakdown of outstanding consumer credit by type of loan
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Latest news
Crédit Agricole is set to acquire Pledg in the fractional payment sector. - 15/02/2024
- Pledg, a Paris-based start-up, was founded in 2016 and specializes in fractional payment solutions.
- The type of credit offered by Pledg can increase the conversion rate of purchases by 20 to 30 points.
- In 2023, Pledg credit represented 5 billion euros for France, or 10% of overall consumer credit production.
- BNP Paribas bought its Floa subsidiary in 2021 for around 250 million euros.
- Two years earlier, BPCE had acquired 50.1% of Oney Bank, a banking subsidiary of Auchan.
- Pledg raised 15 million euros in 2021.
- Pledg claims production of 220 million euros in 2023.
- Pledg has over 200 commercial partners. The Pledg fintech employs 23 people.
Damart back in the red - 05/09/2023
- Damartex sales fell by 9.5% in fiscal 2022-2023, to 650.4 million euros.
- Net income for the same period was negative, at -32.6 million euros.
- The Afibel brand, owned by Damartex since 2010, is put up for sale.
- It employs nearly 400 people and generates sales of 65 million euros.
Damart gives itself a facelift | Damart rejuvenates - 16/05/2023
- Damart's winter sales increase due to soaring energy prices and the lowering of office temperatures to 19°.
- Damart founded in 1953.
- Thermolactyl warming garment accounts for 20% of sales
- Damart products used by professionals such as the French Ski School (ESF), Patrouille de France pilots, Belgian police and SNCB agents.
- Damart focuses on senior customers.
- The company has enjoyed steady growth over the past decade, thanks in particular to its women's sheathing pants and comfort shoes.
- Damart is maintaining its distance-selling catalog business, although this segment is declining
- Increased adoption of e-commerce by 55-65 year-old customers.
- Damart's technical component sets it apart (like K-Way or Aigle).
- Damartex has diversified into home healthcare, a sector with promising margins as the population ages.
Sofinco - 16/05/2023
- Sofinco is a Crédit Agricole subsidiary specializing in consumer credit.
- Sofinco has reduced its number of physical branches from 125 in France to just 15 today
- . Team of 2,500 employees.
- Crédit Agricole Consumer Finance (CACF) has invested 60 million euros in consumer credit in Spain.
A good first half at Cafom - 16/05/2023
- Revenues from stores in French overseas territories: 61% of sales
- Opening of three new Nature & Découvertes stores.
- Opening of the vente-unique.com e-commerce platform in France.
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