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Consumer credit sees double digit growth in Italy in first quarter

by Enrico Netti

Consumer credit in Italy rose 15.4% in the first quarter of 2017 compared to the same period of the previous year, while personal loans rose 23%, industry figures show. Mortgages for home purchases increased by more than a quarter, more or less the same amount as loans for the purchase of a car or a motorbike, according to the figures from the credit observatory of Assofin, Crif and Prometeia.

The data also pointed to a decline in loans for the purchase of goods and services such as, for example, consumer electronics and large electrical domestic goods. Pensioners are the protagonists of the use of income-backed loans (+11.6%) after a slowdown in the second part of 2016.

“In the first quarter, retail credit has consolidated its growth and confirmed its role in supporting the acquisition choices of families,” said Kirsten van Toorenburg from sector association Assofin. “The driving force is coming from mortgages, car financing and personal loans of which a third is linked to refinancing of existing loans.”

The study also highlighted a cautious return of confidence among families, supported by a slightly improved macroeconomic picture and low interest rates. These are all factors that are supporting a return to retail credit.

Looking at the forecasts for the medium term, Rita Romeo from consultancy firm Prometeia said the current cycle is set to continue: “In the next two-year period, we expect a consolidation of recovery in consumer credit and credit for house purchases, on the long wave of improving economic conditions of families,” she explained. “Families have shaped their strategies based on caution to not overload themselves with commitments that would lead to budget problems.”

According to consumer finance company Findomestic, “credit supports the large part of purchases in retail, to the benefit of large distribution stores in Northern Italy, and in the car sector. In consumer electronics and big electrical domestic goods, half of sales come about thanks to credit.”

Data from consumer credit specialists Compass confirm the importance of the electronics, furniture, health and travel sectors.

“In our case, more than 50% of loans supplied for these sectors in 2016 were in the South and the islands,” said Luigi Pace, director of marketing and customer management. “This is a phenomenon common to the consumer credit market, where this geographical area makes up 40% of cases.”