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Not just mortgages: the interest rate cyclone has also hit the other side of family financing, that of consumer, finalized and personal loans, as well as salary-secured loans. And as with real estate and mortgage-backed transactions, the worst seems to be behind us for this market segment too. In the current year, in fact, a return in demand is looming, by virtue of the long-awaited reversal in the ECB’s rates and also thanks to the push given by the growing requests of younger customers: a phenomenon, the latter, which has the flip side of the coin a potential increase in risk for banks and other operators in the sector.
The Experian-Segugio.it report
In short, it is a favorable picture in many respects, but certainly not free from unknowns, that traced by the report on loans produced in tandem by the global information company Experian and Segugio.it, a point of reference in the Italian market for the online comparison of loans, insurance and utility services belonging to the MutuiOnline group. The analysis, which takes into consideration personal, finalized and salary-secured loans, thus providing a general picture of Italians’ requests for financing and identifying the underlying consumption trends, seems to identify a turning point.
Loans are recovering and we are approaching the moment when rates will fall, giving new impetus to the sector
«Loans are recovering and we are approaching the moment in which rates will fall, giving new impetus to the sector», explains Alessio Santarelli, CEO of Segugio.it, who for this very reason predicts «a significant increase in demand in the second half of 2024″. The light has actually already appeared at the end of the tunnel, at least in some areas: based on the Experian Credit Information System, in the whole of 2023 the volume of loan requests aimed at purchasing certain goods or services grew by 10% compared to 2022 and 27% compared to 2021. In the same period, the demand for personal loans and salary-backed loans remained behind, respectively by 1.6% and 4.5% according to what emerges from the Assofin Observatory on consumer credit and credit cards.
DESCENT IN SIGHT?
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The importance of rates
«The increase in requests for finalized financing, compared to those for mere liquidity that characterized the previous quarter, is a good sign because it indicates less suffering compared to the current economic crisis» continues Santarelli. In this respect it should be noted that a boost has already come from the rates themselves, which for these types of loans have already started to fall last year, from the average peak recorded at 8.3% in April up to 6.6% at the end of 2023 On the contrary, the conditions for personal loans and salary-backed loans have remained unfavorable, only to begin to improve in the first months of this year, making us confident in a turning point.
The role of “generation Z”
In this regard, younger customers seem to play a significant role, those belonging to the “generation Z” in the range between 18 and 28 years, for whom there is a constant increase in the use of loans to finance goods and services useful for the own future that would not otherwise be accessible. Their requests have grown in one year in terms of volumes by as much as 28% for finalized loans and 21% for personal ones, representing almost a tenth of the total. «The increase entails a greater risk for operators in the sector», admits Santarelli, noting in particular how the under-25s in the high and very high risk bands grew by 2.3 percentage points in 2023 and represent 7.3 % of the total for this age group.