Consumer Credit in Germany

PROSPECTS

Positive economic outlook provides high planning security

In 2019, the economic context in Germany continued to provide an environment favourable to consumer lending. Enabled through the continuously low base interest rate of 0.

Gross lending increase reflects growing willingness to take out loans

Against the backdrop of a flourishing economy and low interest rates in 2019, consumers in Germany increasingly took advantage of attractive credit deals which is reflected in the rise of gross lending across subcategories. Home lending and auto lending posted the highest growth in gross lending, two highly relevant areas for German consumers, followed by durables lending, especially in the context of POS loans.

Credit cards with growing impact on consumer lending

In 2019, card lending posted the strongest growth in terms of gross lending and outstanding balance. Although comprising the lending through both credit and store cards, the current trend is driven solely by credit cards as store cards continued their downward trend.

COMPETITIVE LANDSCAPE

Traditional bank and POS loans see growing online competition

In the past, when the rather cautious German consumers decided to take out a loan, they have usually compared various offers and conditions from retailers or banks. Now, as e-commerce continues to be the growth driver in the German retail landscape, online options are becoming increasingly relevant.

Success of Auxmoney paves way for new fintechs in consumer lending

In the digital space, consumer credit in Germany sees growing influence from fintechs, focusing on peer-to-peer lending and thereby becoming serious competitors to traditional banks. In this context, the pioneer German start-up Auxmoney has continued its rise in recent years, thus prompting other fintech start-ups to follow suit, given the strong growth potential in online consumer lending.

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