” After a virtually stable activity in April (-0.3% compared to April 2016), institutions specializing in consumer credit regain the path of growth in May: production of new loans rose by +6, 2% compared to May 2016 “. This is the main conclusion of the latest results published by the French Association of Financial Companies (ASF). The activity is boosted by the excellent figures of the LOA (lease with option to buy).
Classic Credit Operations Take Colors
In total, the production of consumer credit amounts to no less than € 3,423 million, compared to 3,222 one year ago in the corresponding period.
In detail, conventional credit operations and LOAs show excellent results… but not with the same intensity.
Let’s start with classic credit operations. After a bad month of April, the activity falls – 1 month later – up 3.6% (to 2,813 million euros), including:
+ 3.2% for appropriations allocated (-5.5% in April);
+ 1.9% for revolving loans (-4.1%);
+ 5.1% for personal loans (-2.0%).
Overall, conventional credit transactions account for most of the production of the consumer credit market.
LOA operations still as active
These fluctuations in results, the LOA does not know. On the contrary. If this market weighs only “609 million in the production of credits conso, activity is incredibly dynamic with + 24.2% in May. A result which again marks an acceleration compared to April (+ 17.5%).
For the record, the LOA designates a financing solution alternating rental period and – if applicable – acquisition. Clearly, a borrower rents a property (a car for example) during a given period, then at the end of it, he can return or buy it. In the second case, it must pay the residual value of the property, provided for in the LOA contract from the outset.
This method of financing is mainly used for the use (or acquisition) of a car. The figures of the ASF relating to ” LOA automobiles ” are also there to attest:
+ 24% increase over 1 year. In comparison, LOAs ” other materials “, they have increased by only 1.7%;
a production volume of 522 million out of a total of 609 million for LOAs.
Credit allocated against LOA
If we look at the figures of the credits allocated to the purchase of a vehicle, the observation is clear: the drivers turn more towards the LOA.
The credits allocated to new cars fell by 9.5% to 195 million euros. On the other hand, the trend is reversed in terms of the credits allocated to ” second-hand ” vehicles (the second-hand market): + 8.4%, to 287 million.
Note that if we combine the car loans to new vehicles (credits allocated and LOA, so), the activity represents 717 million euros (637 million years ago), a nice increase of 12.6%.