Consumer credit is essentially the loaning of money for personal, family or household purposes. This type of loan comes in various forms, such as lease-purchase, overdraft credit and automobile loans. While the possession rate of consumer credit in France has decreased over the past few years, the value of the loans taken out has kept increasing, reaching 187.2 billion euros as of the third quarter of 2019. That same year, automobile purchases represented the type of project the most financed by consumer loans in France.
Bank loans also represent an opportunity of growth for businesses. Indeed, often companies need external financing to be able to expand products, increase service quality and satisfy an increasing demand. In 2019, over 1 trillion euros of outstanding loans were distributed to resident companies in France. While the average interest rate of business loans to small and medium-sized companies is higher than for large companies, they represent the strongest demand of corporate loans in the country.
External financing is also mainly needed when it comes to the purchase of real estate property. Without a mortgage, owning a property would be impossible for a large part of the population, especially in regions such as Ile-de-France, where the demand and the prices have been increasing over time. In 2019, more than 31 percent of the population had at least one home loan, and the average value of the loans granted amounted to 170,200 euros.
Customer loans thus represent an important and productive market for French banking institutions. Indeed, the value of customer loans for large banking groups such as Société Générale and Caisse d'Epargne has been increasing over the past six years, and is expected to keep doing so.
