Consumer loans resist the general fall in credit and grow 6.5% until September

The rate increase of the last year and a half has hit the credit demand of households and companies, but not all. Consumer credit resists almost immune to the increase in the price of money dictated by the European Central Bank (ECB) and is mainly responsible for the 4.3% growth that the non-bank financing industry has experienced until September compared to the same period from the previous year.

Specifically, consumer financing soared by 6.5% in the first nine months of the year, reaching 20,877 million euros, according to data provided to EL MUNDO by Asnef, the employers' association that brings together regulated financial entities and specialized in Spain in consumer financing.

The figure stands out in a context marked by the general contraction of credit to households and companies. According to the latest data from the Bank of Spain, the financing granted by financial institutions to Spanish families fell by 2.8% in October, to 682,952 million euros, while business financing fell by 3.6%, to the 922,261 million euros. In this case, as is the case with EFCs, consumer credit is the only segment that holds up with an increase of 2.08% in October.

The purchase and sale of vehicles and the financing of daily life are the most common destinations for that credit money that families increasingly request, even though its average price – around 8.2% in October, according to the Bank of Spain – is higher than the general loan.

Along with consumer credit, the financing of capital goods granted by the entities that make up Asnef has also proven resilient. In this case, the granting of new credit grew by 4.2%, to 782 million euros, while real estate operations contracted by 74.8% in the same period, going from 532 million euros in new investment in September 2022 to 133 million this year.

In total, between consumer credit, capital goods and real estate operations, the new financing of the EFCs totaled 21,794 million euros, thus showing that the increase in the price of money has not been an obstacle for many clients who have resorted to this type of establishments to contract credit. Altogether, the total outstanding balance of the sector stands at 35,575 million euros.

As indicated by the Bank of Spain, financial credit establishments (EFCs) are entities that are dedicated to carrying out credit operations in a specific area: consumer credit, mortgage credit, cards, guarantees, leasing (financial leasing with option of purchase), factoring (assignment of a credit portfolio)… They are regulated in Law 5/2015, of April 27, which establishes creation conditions similar to those of banks, but with lower capital requirements.

The growth of consumption in recent years has run parallel to the growth of this type of entities. Thus, according to INE data collected by PwC, household consumption stood at around €785 billion in 2022, 16.5% above the previous year.. In this scenario, as reflected by the Cetelem Observatory, 40% of consumers consider financing as an alternative to acquire goods and services, especially home renovations (55%), renewable energies (37%) or acquisition of kitchen equipment (32%).

In 2022, Asnef associates granted credits and loans worth 70,709 million euros (above the 60,733 million euros of financing in 2021). The organization, through the report Socioeconomic and tax impact of financial credit establishments prepared by PwC, has wanted to measure the impact of this activity on the Spanish economy. Among other conclusions, the study points out that the financing granted by the EFCs contributed 34,641 million euros to the national GDP, 19.5% more than in 2021.

At the labor level, this financing also participated in job creation. According to their calculations, for every million euros granted by Asnef associates, 9 positions were generated, up to a total of 634,214 direct, indirect and induced jobs, 8.85% more than last year.

On the fiscal side, the financing granted in 2022 had an impact of 9,325 million euros, 14% more than the previous year.

In the words of Ignacio Pla, general secretary of Asnef, “the figures in the report confirm that Financial Credit Establishments are a very relevant actor in our country, thanks to the direct impact of their activity and the impact of all the financing granted.”

For his part, Jordi Esteve, partner at PwC, assures that “when analyzing the weight of EFCs in our economy, it is very important to take into account the unique singularity of this industry, since the financing granted by these establishments multiplies its socioeconomic impact”.