The governments of the European Economic Area are trying to revive growth after several quarters of recession, growth is reappearing but very weakly. This gloomy economic environment is obviously felt in the world of credit. An update on this hot topic.
Belgians are borrowing more and more with the credit in Belgium
Belgians are borrowing more and more for secondary purposes
Ten or 20 years ago, Belgians mainly borrowed to buy a house, to build or renovate their house or to take out an auto loan. Currently, it has become quite common to take out a loan to go on a trip, buy school books, or finance cosmetic surgery. In 2010, barely 6% of installment loans were used for such personal projects compared to nearly 15% now, an astounding increase of 9% in just 3 years…
Belgians are borrowing larger amounts
At the end of June 2012, Belgians still accumulated about 2 million installment loans, which is 12% more than 10 years ago according to figures from the Professional Credit Union (UPC). The total amount of all these loans equaled a total of 16.63 billion euros, an increase of nearly 57% over a 10-year period…
The amounts borrowed are also much larger. A survey conducted on 1200 people representing a significant panel showed that 46% were repaying a loan at the time of the survey compared to 38% three years earlier.
The amount of defaults has never been so high
As a corollary to the explosion in the number of loans, the amount of payment defaults by Belgians reached 2.888 billion euros in August 2013 and has never been so high in Belgium according to the latest figures from the Central Credit Register for Individuals.
Mortgage Credit Slowing Down
While consumer confidence is on the rise, the economic situation remains difficult. Thus, requests for mortgage credit declined in August. According to the August figures from the UPC mortgage credit barometer, the number of mortgage credit requests decreased by 6.8% on an annual basis, and the amount of requests fell by 6.4%.
The credits granted also decreased in terms of demand (-13%) and amount (-10%).
We therefore see an opposite trend in mortgage credit compared to installment loans.