Consumer credit rebounds in October to levels prior to the 2008 crisis due to improved expectations and increased employment

He consumer credit It is already moving at levels prior to the outbreak of the financial crisis in 2008. Financial credit institutions have granted loans for durable consumer goods and services worth 4,478 million during October, an unprecedented level in a single month since November 2007, when operations amounting to 4,899 million were financed. The figure represents a year-on-year increase of almost 22%, in line with the growth experienced in the accumulated of the first ten months. which is close to 38,000 million together.

“This increase is part of a return to growth after years of deleveraging, with households recovering their financed spending capacity,” he explains. María Ruiz-Manahan, CEO of BNP Paribas Personal Finance in Spain. The improvement in consumer confidence has translated into an improvement in household expectations in the heat of the labor market, after the number of members of the Security Social set the record of 21.8 million people.

Asnef sources explain to ‘La Información Económica’ that the moderation of interest rates has also served as an impetus to encourage demand, whose rebound is supported by “regulated entities that guarantee the application of concession criteria appropriate to the regulations current”. The other side of the coin is represented by those who have problems making ends meet and resort to this type of financing to cover unforeseen expenses.

In this context, the volume of outstanding balance – which measures active credits – has been placed at end of October at 113,047 million, 11.5% morea rate at which it had not grown since February 2020, when the Covid-19 pandemic broke out. The first time it crossed the 100,000 million barrier since the last recession was in March 2024from which point it has followed an upward path. The year started above the threshold of 104,000 million. The outlook for the coming months will continue in this vein as long as the outlook for the economy remains unchanged.

Consumer loans are designed to cover personal needs for an amount that can range from 100 or 200 euros up to 75,000 euros. Figure that with the new European directive will be extended to 100,000 euros. In addition, they are designed to be easy to access, because banking is covered with high interests. According to the latest data from Bank of Spain (BdE)the average rate at which operations were approved in October stood at 6.79%, its lowest level since June 2022, before the European Central Bank (ECB) ended the era of ‘ultra-low’ rates.

Precisely, the Ministry of Economy, Commerce and Business expects to bring to hearing in the coming weeks the draft law that will develop the aforementioned European consumer credit directive. This new legal framework seeks to prevent over-indebtedness and design a framework of trust for the consumer, establishing access rules, as well as the supervision of entities that are dedicated to this activity in order to avoid abuses. Under this law, the obligation will be established to provide information about the contracted credit 24 hours before to compare offers.

In Spain, any company can offer loans without being under the umbrella of the supervision that monitors the credit financial establishments and the banks themselves. This has caused digital platforms for quick loans to emerge, but at the cost of interest that could be classified as usury. As they are not subject to supervision, they may not meet certain requirements, such as evaluating whether the client has the capacity to repay the loan. Now they will be required to be registered. Also under the new framework will be interest-free credits associated with the purchase, which operate under the ‘buy now and pay later’ claim or credits refundable in three months. However, the main novelty will be the cap on the price of credit, which in practice implies a generalized regulation of interest rates.