The consumer credit market - Spain (2024)

1.2 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 balances on credit cards. Nevertheless, European countries share a common trend: the growth of consumer credit.

Annual growth in European consumer credit production Europe, ****-****, in % Source: ****

In the **-nation European Union, total consumer credit outstanding increased by *% in ****, reaching *,*** billion euros at December **. This increase is mainly due to ...

1.3 the domestic market

The consumer credit market is determined by the key interest rates offered by the European Central Bank. These allow banks to refinance themselves on the basis of an interest rate. The higher the interest rate, the more commercial banks will be unable to offer low interest rates on their various credit products, and vice versa. Moreover, the interest rate ultimately determines the cost of credit, and therefore its accessibility to the consumer.

To support growth and reduce inflation, the ECB's key interest rates have changed. Since ****, this rate has been raised several times, notably to allow inflation to slow from **** onwards. ...

2.1 Motivations for borrowing

Between January **** and June ****, Spaniards' intention to apply for consumer credit showed a significant increase. In January ****, only **.*% of consumers were considering applying for consumer credit. This proportion rose to **.*% in January ****, then to **.*% in June ****. The trend continued with a notable rise, reaching **.*% in June **** and then **.**% in June ****. However, the willingness to take out a consumer credit loan declined in the first quarter of ****, to **.**%.

Trend in intention to apply for consumer credit Spain, ****-****, % of total Source: IV Barómetro préstamos al consumo ASUFIN In ****, a survey in Spain revealed that **.**% of respondents intend to apply for ...

2.2 Demand trends

In Spain in ****, the breakdown of new loans to households shows a predominance of mortgages, which account for **.**% of the total. Consumer credit accounts for **.**% of new loans granted.

Breakdown of new consumer and real estate loans for households Spain, ****, % (***) Source: ****

Between **** and ****, the amounts granted for new consumer loans in Spain will fluctuate. In ****, they stood at **.* billion euros, rising to **.* billion euros the following year. In ****, they rose to **.* billion euros, then continued to increase to **.* billion euros in ****. However, a slight drop was observed in ****, to **.* billion euros, followed by a sharp fall in **** to **.* billion euros. A ...

2.3 Macroeconomic variables affecting demand

While inflation and the ECB's key interest rate partly determine the different interest rates on loans offered by commercial banks, other economic factors can have an impact on households' decision to take out consumer credit.while inflation and the ECB's key interest rate partly determine the different interest rates offered by commercial banks, other economic factors can have an impact on households' decision to take out consumer credit. Thus, the overall economic context determines the propensity of households to save or consume.

Unemployment rate:

Between **** and the first quarter of ****, Spain's unemployment rate fluctuated significantly. In ****, the rate stood at **.**%, before ...

3.1 Market structure

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 releasing the funds. Contract management mainly involves monitoring repayments and the loan file. Collection optimization

These stages are mainly handled by lenders, who can take care of the entire production and distribution process without the intervention of external distributors. If a distributor is not also a lender, its role is ...

3.2 Market players

The consumer credit market in Spain is heavily dominated by banks. However, other players can also offer consumer credit:

Banks and Credit Institutions: Traditional banks and credit institutions approved by the Bank of Spain can offer consumer credit. Credit cooperatives: Credit cooperatives, also known as savings banks or credit unions, can also offer consumer loans. Finance companies: These are companies that specialize in providing financial services, including consumer credit, but are not banks. They are regulated by the Bank of Spain. payment Institutions: Some payment institutions may also offer consumer credit solutions, although their main role is often related to financial ...

4.1 Offer typology

The table below shows the different types of consumer credit available in Spain:

Source: ****

4.2 Interest rates on consumer loans

The graph below shows the evolution of weighted average interest rates on consumer loans in Spain. Their rates, although determined by commercial banks, are impacted by the discretionary decisions of the European Central Bank, so that a rise in rates was observed in **** following the increase in the ECB's key interest rate.

Thus, between **** and ****, weighted average interest rates on consumer and other loans to households in Spain showed significant variations. In ****, the weighted average rate was *.**%, rising to *.**% in **** before declining slightly to *.**% in ****. A stabilization was observed in **** with a rate of *.**%, followed by an increase in **** to *.**% and ...

5.1

Ley **/****, de ** de junio, de contratos de crédito al consumo regulates consumer credit in Spain.

This law covers the following points:

Definition of consumer credit: Intended solely for individuals for non-business use. Information obligations: Lenders must provide full information before, during and after conclusion of the contract, including on associated costs such as insurance. Right of withdrawal: Consumers have ** days to withdraw from the contract after signing it, with no justification required. Right of early repayment: Consumers may repay all or part of the loan at any time without undue penalty. Linked contracts: apply to loans specifically for the purchase ...

6.1

The table below provides a non-exhaustive overview of the main types of player.

• BBVA
• BBVA
• Carrefour France
• Younited Credit
• Cetelem
• Santander
• Banco Sabadell
• Caixabank