Consumer Credit in Japan

PROSPECTS

Card lending to see strong growth

Card lending is set to be the fastest-growing area of consumer lending in terms of both outstanding balance and gross lending over the forecast period. Japan remains a cash-heavy society in which debt has historically been considered shameful.

Faltering scheme to fill empty homes has potential to boost home lending

Home lending is expected to grow in terms of both outstanding balance and gross lending over the forecast period. Growth is set to be bolstered by the government’s ongoing efforts to address the issue of the large number of vacant homes in the country and the housing problems faced by low-income and single seniors.

Sharing economy undermines demand for auto lending

Auto lending is forecast to register a poorer performance in terms of both outstanding balance and gross lending between 2019 and 2024 than it saw over the review period. Changing attitudes to material possessions and ownership amongst younger Japanese consumers are likely to have a negative impact on the development of auto lending during the forecast period.

COMPETITIVE LANDSCAPE

Banks continue to focus on card lending, though with a more restrictive approach

Banks continue to focus on card lending, which can progress into revolving payments that provide a significant source of income in a negative interest market. However, there are growing concerns about over-lending by banks, with the number of personal bankruptcies increasing for the first time in 13 years in 2016 and continuing to rise in 2017 and 2018.

Falling family incomes lead to higher education lending despite fall in population of 18 year-olds

Education lending is expected to grow in terms of both outstanding balance and gross lending over 2019-2024. Japan Student Service Organisation (JASSO), the largest education lender in Japan, has pointed out that admission and tuition fees remain high in the country whilst the average family income declines.

Specialists work to acquire new customers in increasingly competitive environment

Specialist lending companies, such as Acom, Aifulalbeit and SMBCCF, face increasing competition from non-specialists such as banks, including those owned by major retailing groups. Major grocery retailing players, such as AEON, 7-Eleven and Lawson, have their own banks, which are able to attract consumers through strong loyalty programmes and convenient services such as lending money through ATMs in stores.

Files are delivered directly into your account within a few minutes of purchase.