Last year consumer credits went down, whereas the borrowed amount increased
Last year, consumer credit providers (non-credit institutions), including peer-to-peer lending platform operators, granted 235,000 new consumer credits. This is almost 16% less than in 2020 but the total amount of consumer credits increased by almost a quarter. This demonstrates the increasing amount of money borrowed by the population and the rapid growth in the average amount of credit, which stood at €2,048 in 2021, 46% higher year on year.
The fact that the number of consumer credits granted is declining while the total amount borrowed is going up could be explained by the willingness of the population to borrow larger amounts and purchase more expensive items. On the other hand, rising wages are contributing to an increase in the ability to borrow such amounts. We have also noticed that the maturity of credits has increased slightly,” says Aistė Tavorė, Principal Specialist of the Credit and Insurance Services Supervision Division.
Interest in peer-to-peer lending platforms remains strong, with an increasing number of both borrowers and investors. At the end of 2021, the loan portfolio of peer-to-peer lending platforms stood at €76.5 million, an increase of 27.8% from 2020. Both the number and the amounts of consumer credit agreements granted through these platforms increased last year. Almost 14,000 new consumer credits were granted, totalling nearly €53 million (up by 49.2% from 2020). The duration of consumer credit agreements granted through peer-to-peer lending platforms continued to increase, while the average annual interest rate on consumer credits declined.
In 2021, the share of overdue consumer credits went up slightly, both in the portfolios of peer-to-peer lending platforms and other consumer credit providers (non-credit institutions). This indicates that some residents who have taken out loans are still struggling to repay them on time.
At the end of last year, around 7.7% of nearly 294,000 consumer credits were overdue by more than 90 days. The total outstanding amount (including late payment interest, penalties and other amounts payable under the agreements) was €35 million at the end of 2021.
In 2021, a third of consumer credit agreements was concluded for linked consumer credit (hire purchase of goods and services). Their number was close to 78,000 (€219 million), nearly a third less than in 2020. The average amount of one such credit rose sharply by 71% to €2,816, with the average annual interest rate of 3.3%, the average annual percentage rate of charge for consumer credit of 7.3% and the average maturity of 4.5 years. By type of consumer credit, the average amount of linked consumer credit grew the most.
The number of other consumer credits granted in 2021 stood at around 155,000 (€260 million), down by just 3.3% from 2020, but the total amount went up by almost a third. The average amount of consumer credits stood at €1,677 (almost €1,231 a year ago), the average annual percentage rate of charge for consumer credit fell to 37.1% and the average interest rate went down from 23.7% to 20.8%. The average maturity of other consumer credit was 3 years and 2 months.
At the end of 2021, the public lists of consumer credit providers and peer-to-peer lending platform operators included 61 companies (non-credit institutions) authorised to issue and administer consumer credits. Out of these, 33 were active in the provision of new consumer credits. Consumer credit providers (non-credit institutions) account for around half of the overall Lithuanian consumer credit market.