Following the 2020 downturn (-21.6%) caused by the pandemic, consumer credit lending rebounds (+29.4%) in the first four months of 2021, but does not return to pre-COVID levels (-12.1%).

The 50th edition of the Consumer Credit Survey, by Assofin, CRIF, and Prometheia, shows that there was an unprecedented contraction in new consumer credit in 2020 due to the impact of the COVID-19 pandemic.

In the first four months of 2021, total disbursements showed a growth of +29.4%, mainly thanks to the rebound in March and April, compared with the same months in 2020 during which the volumes disbursed reached a relative minimum. However, the market has not yet returned to pre-COVID levels. A comparison with the first 4 months of 2019 still shows a contraction (-12.1%).

In the area of real estate mortgages to consumer households, there was a double-digit increase in 2020 (+12.7%), accelerating in the first four months of 2021 (+34.6%). A comparison with the corresponding period in 2019 shows an even larger increase (+39%), confirming that the importance of owning a home, supported by credit, strengthened for Italian consumers during the pandemic.

Consumer credit distribution channels

With regard to the distribution of consumer credit, there has been an increase in the share of disbursements channeled through the agent/broker network, thanks to increased mobility which has also made it possible to follow up with clients in their homes, and through the online channel, which has benefited from the acceleration of the digitalization of both supply and demand during the pandemic.

Consumer credit risk analysis

In 2020, the sharp decline in disposable household income was partly mitigated by government interventions that contained the rise in credit risk. Specifically, the 90-day default rate for retail credit as a whole (i.e., real-estate mortgages and consumer credit) showed a decrease, standing at1.2% in March 2021, the lowest point in recent years.

Looking at the types of credit, the reduction involved both retail finance, standing at 1%, and personal loans, with a larger contraction to 2.3% in March 2021.

Since the last quarter of 2020, the 90-day default rate for real estate mortgages also reduced, standing at 1.2% at the end of March 2021.

Forecasts for 2021 indicate that demand for credit will also be supported by the recovery in consumption and low interest rates throughout the forecast period. Overall, consumer credit stocks will strengthen growth rates in 2021, while still incorporating the effects of NPL disposals on the market, which will remain important in stemming the impacts of the crisis on operators’ balance sheets. Growth will continue into 2022-2023 at an average rate of 3% per year.