Bank of Lithuania
2021-03-12
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In 2020, consumer credit providers (non-credit institutions), including peer-to-peer lending platform operators, issued 278 thousand new consumer credits. This is a decrease of 36%, compared to 2019. Meanwhile, the total amount of funds borrowed by consumers last year was smaller by nearly one fourth, amounting to slightly more than €390 million.

Consumer credit providers finished 2020 with a one-third smaller number of valid consumer credit agreements, whereas the total amount of the consumer credit portfolio shrunk by slightly more than 11%. The decline was influenced by the change of the type of activity of two consumer credit providers, however, the downward trend is still obvious even after eliminating the effect of these market participants.

“We have observed a gradual contraction of the consumer credit market for several years already, and last year the pandemic contributed to it as well. Borrowing habits of households changed. In an environment of uncertainty, consumers were likely to avoid assuming new financial liabilities. Moreover, the need to borrow for certain purposes, such as holiday or vacation, declined during the quarantine. However, borrowing via peer-to-peer lending platforms increased slightly,” said Jekaterina Govina, Director of the Financial Market Supervision Service of the Bank of Lithuania.

At the end of 2020, the portfolio of loans granted via peer-to-peer lending platforms was 20% higher than at the end of 2019. Although the number of the agreements on consumer credit granted via these platforms dropped by 6%, their total amount went up slightly (by 4%). The maturity of consumer credit granted via peer-to-peer lending platforms increased, while the average annual interest rate of consumer credit decreased.

According to Ms. Govina, a part of consumers with loans had difficulties in repaying their credits on time last year. This is evident from the fact that the outstanding amount of consumer credit remaining after the extension of loan maturity upon the payment of an extension fee by consumers nearly doubled compared to 2019.

At the end of 2020, out of nearly 316 thousand consumer credits, more than 7% were overdue for more than 90 days. At the end of the year, the total amount overdue (including late fees, penalties and other amounts payable under the contract) reached €29 million.

The so-called linked consumer credits (the leasing of goods and services) comprised nearly half of the amount of all consumer credits. In 2020, 115 thousand linked consumer credits were granted (totalling €189 million), which is a decrease of 40%, compared to 2019. The average amount of one such credit increased by 36% and comprised €1,645, the average annual interest rate stood at 4%, the average annual percentage rate of charge was equal to 9.5% and the average credit maturity was four years.

Small credits (up to €290) remained the most expensive and riskiest type of consumer credit. However, the amount of small credits granted in 2020 declined by one third year-on-year.

The average amount of consumer credit (both small credits and credits above €290) comprised €1,231 (nearly €1,166 a year ago), the average annual percentage rate of charge slightly dropped and equalled 41.5% and the average interest rate decreased from 24.5% to 23.6%. The average credit maturity was three years.


At the end of 2020, the public lists of consumer credit providers and per-to-peer lending platform operators included 54 companies (non-credit institutions) with the right to grant and administer consumer credits. Only 40 of these companies had an active role in granting new consumer credits. Consumer credit providers (non-credit institutions) account for nearly half of the entire Lithuanian consumer credit market.

In its capacity as the supervisor of the consumer credit market, the Financial Market Supervision Service of the Bank of Lithuania imposed three fines on consumer credit providers in 2020. These fines were imposed for infringements related to artificial motor vehicle lease transactions conducted for the purpose of circumventing the requirements of the Law on Consumer Credit and the granting of consumer credit to consumers with low income.