The sudden economic downturn resulting from the COVID-19 pandemic led to an abrupt decline in demand for consumer credit in Romania. As a result of the challenging economic environment, consumer credit suffered from a significant drop in consumer confidence and a consequent reduction in appetite for purchases of big-ticket items via loans.
Auto lending has been seriously impacted by the drop in demand for new cars among Romanian consumers over the first six months of 2020, with new car registrations falling by some 31% according to the Car Manufacturer trade association. In addition to the lockdown, the pandemic also resulted in increased uncertainty, making consumers postpone non-essential high value purchases such as new cars.
Over 30 banks operate in Romania, with the sector remaining highly fragmented. However, there is a gradual trend towards consolidation, with two banks being bought by other competitors in mid-2019.
The development of consumer credit over the forecast period will depend heavily on the rate of economic recovery and government support programmes. Despite the severity of the recession, strong financial aid in response to the economic fallout of the pandemic will help to safeguard jobs and boost demand.
Card lending is a strong competitor for most other non-card lending alternatives in Romania as a result of rising demand for convenience among consumers. This is mainly due to the possibility of making payments in up to 24 instalments, interest-free.
With limited space to seriously differentiate between each other, many banks, as well as non-banking institutions, are looking to increase the ease of applying for credit. This is happening through the development of online credit approval systems, making the process smoother, easier and faster.
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Understand the latest market trends and future growth opportunities for the Consumer Credit industry in Romania with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
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This report originates from Passport, our Consumer Credit research and analysis database.
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