We will try to measure the attractiveness of consumer credit in different markets measuring the potential increase of these markets in value terms in the next years.
We may measure the “consumer credit market penetration rate” as the ratio between the total stock of consumer credit assets and the gross national product in each country. This consumer credit market penetration rate is high in UK, Austria, Greece and Spain (8% to 12%), is over the average in Germany, France and Poland (7% to 8%) and is low in Italy, The Netherlands, Sweden, Belgium (3% to 5%). Since the attitude towards consumption is getting similar across Europe, both in terms of life-style and spending, we may presume that also the countries with a low consumer credit market penetration rate might increase the use of debt spending to a potential 7.5% minimum level within a medium time frame.
If we compute the difference between the actual consumer credit market penetration rate and the 7.5% potential target rate and we apply it to current GNP, we have a first “quick and dirty” measure of the size of the potential market increase. The larger market is located in Italy where 4 points of increase in the consumer credit market penetration rate means about 48 billion euro additional market size. However this is not useful if we do not have an idea about the speed path.
The consumer credit market has a strong growth rate in Spain, Italy, Greece and Poland, is decreasing in the UK and in Poland and is more or less stable in other countries. We do not expect that the strong growth rate will continue as in the past, but if we combine this information with the mentioned penetration rate, we may derive the conclusion that there is a market in which consumer credit growth is consistent and that is Italy.