Consumer Credit in Japan

2020 IMPACT

COVID-19 pandemic sees gross lending decline in 2020

While card lending remains the leading category in terms of gross lending, it was inevitable that it would experience a decline in 2020 as consumers were becoming increasingly careful with their spending in the uncertain economic situation against the backdrop of the COVID-19 pandemic and the impact of the measures taken to slow its spread. According to Japan Financial Services Association, both outstanding balance and gross lending recorded declines in the April-May 2020 period.

Auto lending hit by closures and uncertain economic climate

With dealerships closed and people responding to the government’s stay-at-home recommendations, it is no surprise that car sales were declining during the COVID-19 outbreak. Monthly new car sales in May 2020 were down 55% year on year, by 23% in June and a further 14% in July.

AI score expected to continue expanding

AI score has been one of the fintech areas in the spotlight in Japan. While it may not have been seeing particularly strong penetration in the past few years, AI score and lending services are starting to gain a stronger presence in the marketplace, with competitor products beginning to struggle.

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