The increase is timid but it gives rise to cautious hope among certain consumer credit professionals: the volumes of new credits increased by 2.4% in February and by 2.3% on average over the last three months, to 3, 64 billion euros, according to monthly statistics from the French Association of Financial Companies (ASF).
This progression contrasts with the slight decline (of 0.8%) recorded in 2023, a year marked by the rapid rise in interest rates and the deterioration of the economic situation, after a jump of 20% over 2021-2022, the years of post-Covid recovery.
The small upturn in household consumption, visible in the latest French growth figures, provides support for demand, even if the surge in prices of the last two years is still being felt, particularly on personal loans, those which do not are not assigned to a particular purchase but the use of which by the consumer remains free.
Inflation, then geopolitical tensions, have left their mark. “Some French people, in uncertainty, tend to postpone certain projects and prefer to save out of prudence. The inflationary crisis weighs on budgets. Obviously, this constrains the ability to borrow”explains François-Xavier Coyras, commercial director of BNP Paribas Personal Finance, parent company of Cetelem.
A possible rise in unpaid debts
In this context, credit institutions closely monitor changes in the cost of risk and the provisions they must set aside to cover a possible increase in unpaid debts. “The cost of risk is returning to normal but has not yet returned to its pre-Covid level. It is at a level that is neither abnormal nor alarming”estimates Frédéric Jacob-Peron, president of the ASF and general manager of Franfinance, a specialized subsidiary of Société Générale.
For its part, the credit supply is gradually recovering from two years of squeezed margins between the rapid rise in lenders’ refinancing costs and the slower rise in the usury rate, which caps the rates they can practice.
This development has led many establishments to partially close the credit taps in 2023, and some to reduce their costs. From now on, the gradual stabilization of interest rates and the easing of pressure on the usury rate make it possible to envisage a return to normal. “Supply is coming back because the margin levels that we knew before the surge in refinancing costs are gradually being restored”indicates Franck Oniga, general manager of Sofinco, a subsidiary of Crédit Agricole.
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