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Credit flowing faster through the economy

Page created: Tuesday, 17 March 2015 9:04 GMT

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Consumer Credit  Credit   Loans

Consumer credit put on a 15.3% year-on-year increase in January rising from just over €286 million to €329 million according to figures released Monday by the Bank of Portugal.

Although the annualised surge was to the positive, January did see a 17.9% fall month-on-month with €401 million in consumer loans advanced in December 2014.

Much of this surge can be explained by a single type of credit contract, that for the purchase or leasing of a car and which rose by 37.6% in annualised terms in January and that saw in the region of €20 million of cash advanced for vehicle purchases.

In terms of personal credit loans,those contracts without any specific purpose, whether for home improvements or some long holiday, they rose by 20.9% year-on-year in January to total €151 million according to Portugal’s central bank.

However, in terms of credit cards, lines of credit and overdraft facilities, these fell back by 11.2% in January to amount to €66.6 million.

In other figures out on Monday, ASFAC – the Portuguese Association of Specialist Credit Institutions, said that its members had raised loans by an annualised 30% in 2014 and totalling €5.094 billion.

The ASFAC statement said the increase came from an increase in credits to suppliers that rose by 39% to around €2.3 billion and accounting for 46% of total granted credit.

2014 saw 289,108 credit contracts signed, a year-on-year rise of over 11% with 97.4% signed with the private sector or households with the average contract total €4,863, up 12.2% on 2013.

The statement said that classic credit loans attributed by ASFAC members grew by 25% in 2014 to reach €1.4 billion with revolving credits accounting for 26% of all credit loaned and up 23% year-on-year to stand at €1.3 billion.

The statement also quotes ASFAC President, António Menezes Rodrigues, terming the rise in credit loans as reflecting greater confidence in the economy before highlighting how credits to suppliers represented almost half of all credits and essential to doing business.

JS/SMS/KAR //KAR.