Card lending continued to register strong growth in gross lending and outstanding balance terms in 2020 as the COVID-19 pandemic led consumers towards convenient types of consumer credit which offer good value for short-term borrowing. Growth in card lending outpaced overall growth in consumer credit overall during 2020, in spite of the decline seen in the numbers of credit cards and charge cards in circulation.
Non-card lending registered a strong positive performance in gross lending and outstanding balance terms in 2020. Home lending had a particularly good year as growth was spurred by the desire of many homeowners to renovate and extend their living space during the COVID-19 pandemic.
Auto lending was the only category of consumer credit to register negative growth in outstanding balance and cross lending terms over the course of 2020. The main reason for the category’s struggles was the adverse economic environment that has prevailed in the Czech Republic since the onset of the COVID-19 pandemic.
Overall, consumer lending is expected to maintain positive growth dynamics over the forecast period, although the impact of the COVID-19 pandemic is expected to remain evident. Specifically, the ongoing impact of the COVID-19 pandemic is expected to suppress growth in gross lending terms while inflating outstanding balance.
Relatively slow growth is expected to be seen in card lending over forecast period and this is expected to be the result of the falling numbers of credit cards and charge cards in circulation. Throughout the second half of the review period, the country’s leading issuers of credit cards and charge cards were actively reducing the numbers of cards and circulation as part of their programme to reduce the numbers of unprofitable non-active accounts they are required to administer.
Towards the end of the review period, the Czech National Bank demonstrated its willingness to support the country’s consumer lending industry via the further loosening of legislative and regulatory requirements on banks and other lenders. However, these regulatory changes have been made within the paradigm that credit should only ever be issued to borrowers who are able to demonstrate that they are fully capable of repaying the debt.
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Understand the latest market trends and future growth opportunities for the Consumer Credit industry in Czech Republic 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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