Under the direction of China Central Bank, the five-year loan prime rate was cut by 15 basis points to 4.30% from 4.
The non-performing rate for mortgages/housing has been surging in 2022, as the issue of stalled housing projects remains. The collapse of stable developers has forced homeowners to stop paying their mortgages for fear that their presold apartments will not be able to deliver on time.
Although buy now pay later (BNPL) is still at the pilot state in mainland China, strong growth is expected for the segment, surpassing the growth potential of other types of personal lending, such as microcredit and overdrafts. Its robust growth momentum is being driven by young consumers, since BNPL has several advantages over traditional credit card products, such as easy sign-up, no revolving interest, and the ability to pay in instalments at the point of sale.
Growth momentum is expected for consumer lending in the forecast period, backed by strong economic growth, a more market-oriented lending rate and high internet penetration rate. Players are likely to increase their investment in improving asset quality to reduce the non-performing rate, particularly in mortgages/housing.
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Aggregate of Consumer Credit and Mortgages/Housing. Gross Lending: The total value of loans advanced by institutions in a given year; data refers to single year only. Outstanding Balance: The collective amount owed by borrowers at the end of a given year; data refers to the cumulative impact of debt.See All of Our Definitions
This report originates from Passport, our Consumer Lending research and analysis database.
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