Auto lending gross lending and outstanding balance have been suffering strongly in 2020 due to the closure of automotive dealers during the COVID-19 pandemic, as well as other personal lending, given that banks remained closed during the lockdown. Durables lending and home lending have been recording slightly better performances during 2020, given that many products were purchased online via financing.
Card lending has been performing better than other lending products in 2020, with positive growth both in terms of gross lending as well as outstanding balance. This was directly due to the COVID-19 pandemic and the fact that many consumers have been making digital payments during lockdown, both for hygiene reasons, ie to reduce the exchange of cash to limit the spread of the virus, as well as due to the increasing usage of e-commerce, which, again, facilitates cashless transactions, but has also been an invaluable sales channel during lockdown and in the post-lockdown period, when many consumers will still concerned about shopping in person at physical outlets.
After the initial lockdown period, the requests for auto lending and durables lending were beginning to pick up, enabling these lending types to perform well. This type of financing has been particularly strongly hit by the closure of sales outlets during the March-May lockdown in 2020.
Consumer credit is expected to show a positive trend in 2021 as well as over the rest of the forecast period both in terms of gross lending as well as outstanding balance. While 2020, with the COVID-19 lockdown and the economic consequences of the measures to contain the spread of the virus, saw consumers either unable to make purchases due to the closure of sales outlets or becoming more prudent with respect to their financing habits in the uncertain times, purchases and investments that were put on hold are expected to happen in the years to come, ensuring positive growth rates for consumer credit over the forecast period.
The poor economic environment and the widespread economic crisis as a consequence of the worldwide COVID-19 pandemic and the steps taken to try and control it are expected to hit many Italian households hard. With rising unemployment and many business failures, households are likely to be facing reductions in their disposable income in the coming years, which will increase the need for many consumers to seek recourse to credit to finance their purchasing needs, helping to drive overall consumer credit.
With respect to card lending, the longstanding “war on cash” being driven by the Italian government will continue to encourage consumers to make payments on their cards. However, payment habits could also see permanent changes among some consumers after they were actively discouraged from using cash for hygiene reasons during the COVID-19 pandemic.
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Understand the latest market trends and future growth opportunities for the Consumer Credit industry in Italy with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Consumer Credit research and analysis database.
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