European Consumer Credit Market Saw Positive Results in 2022

New credit granted continued to recover from the pre-pandemic level, with growths seen across different lending categories.

In 2022, European consumer credit providers, represented through Eurofinas, granted new loans worth €501.2 billion, a growth of 11.1% compared to 2021. The results of the Eurofinas 2022 Annual Survey indicated positive developments in new business across various lending categories, except for mortgages.

Overall, total new consumer credit lending experienced a growth of 12.9% in new business financed during 2022. While industrial credit and mortgages accounted for a smaller portion of the total new business, industrial credit observed growth of 26.6% in new credit granted, while mortgages saw a contraction of -4.7%.

Within the consumer credit lending category, personal loans and revolving credit were the prominent segments, collectively accounting for nearly one-third of the new credit granted in 2022. Personal loans exhibited a growth rate of 14.1% while revolving credit experienced a higher increase of 16.4%. Additionally, new credit granted through non-automotive points of sale showed a growth rate of 12.2%.

Regarding consumer vehicle finance, used cars performed better than new cars. Used consumer car finance saw a significant growth rate of 17.0%, whereas new consumer cars experienced a downturn of -2.7%. Other vehicle categories, including motorbikes and caravans, had a moderate increase of 2.0%. Similarly, used business car lending demonstrated a substantial growth of 51.9%, while new business cars experienced a comparatively lower rise of 30.7%. Commercial vehicles also saw an increase of 14.3%.

Aggregate figures for 2022 indicated positive results in most of Eurofinas members' national consumer credit markets, with the exception of Sweden, which experienced a contraction of -5.7% in new credit granted. Just under two-thirds of the reporting countries enjoyed double-digit growth rates, with new credit granted expanding between 10% and 20%. Spain, Portugal, and Turkey led the way with growth rates of 22.2%, 17.2%, and 16.7% respectively, while Morocco and Denmark experienced more moderate growth rates of 0.6% and 4.8% respectively.

Umberto Filotto, Board Member and Chair of the Statistics Committee at Eurofinas, commented that “Despite the multitude of challenges faced in 2022, such as high levels of uncertainty, an energy crisis, unprecedented inflation, tightening financing conditions, and historically low consumer confidence, consumer finance continued its recovery towards pre-pandemic levels and played a crucial role in smoothing consumption of European households. Going into 2023, the European economic outlook is projected to be better than expected at the start of the year, with energy prices falling and consumer confidence recovering from last year’s historical low. However, private consumption is set to remain subdued, posing ongoing challenges for consumer finance institutions across Europe with persistent high consumer uncertainty. Regardless of these headwinds, notable trends emerge in the demand for energy-efficient investments among European households. In response, European consumer credit providers should be prepared to support their customers as they undergo their transitions towards greener choices.