Growth in consumer lending is expected to be lower than before the pandemic. Banks and other finance providers are encouraging consumers to borrow less money for consumer spending and both financial institutions and the Dutch Authority for the Financial Markets (AFM) are focusing on ensuring that consumers do not take on unsustainable lending.
In light of the pandemic, banks and other financial institutions have made the criteria for obtaining a consumer loan stricter. There is increased scrutiny to ensure that the applicant will be able to meet repayments over the full term of the loan.
2021 is expected to see a surge in demand for new cars and as most motorists are unable to purchase a car outright, this is also expected to result in a significant increase in auto lending. The high demand for cars is being driven by increased need for a pandemic-proof method of travel, particularly for commuting.
Overall, there will be a moderate increase in consumer lending over the forecast period, as the economy takes time to recover from the fallout of the pandemic. As consumers gradually regain confidence in their respective financial positions, they can be expected to become increasingly likely to take on more loans and become more ambitious in their borrowing plans, with positive implications for consumer credit.
After education, home lending will register the highest growth in borrowings as home owners look to upgrade or refurbish their homes. The Energy Transition, a government policy designed to make homes more energy efficient, is also expected to play a role in growth by spurring spending on switching home heating systems from gas to electric power.
Card lending is a very flexible source of credit and especially in light of the stricter criteria being imposed on consumer lending due to the pandemic, this flexibility will be an attractive benefit over the forecast period. However, the penetration of credit cards is relatively low in the Netherlands and so therefore a large customer base does not have access to card lending.
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Non-mortgage consumer debt extended to individuals for personal or household use including installment loans and credit cards. Examples of consumer credit include auto lending, card lending, durables lending, education lending, home lending and other personal loans. Consumer credit includes both revolving and non-revolving credit.See All of Our Definitions
This report originates from Passport, our Consumer Credit research and analysis database.
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