Banco de Portugal (BdP) on Thursday said the amount of consumer credit fell 22.5% in 2020, with the number of contracts reduced by 23.9%, mainly due to the Covid-19 pandemic.
“The consumer credit market recorded a significant decrease in the number of contracts and the amount of credit granted in 2020, interrupting the growth seen since 2013,” according to the Retail Banking Markets Monitoring Report 2020, published on Thursday.
An average of €490.3 million was granted per month, which compares to an average of €632.8 million in 2019, with the amount of credit granted similar to 2016.
“The average number of contracts per month also decreased (from 133,264 in 2019 to 101,419 in 2020),” the Banco of Portugal said.
By type of credit, the amount decreased by 30.2% in personal loans, 15.1% in car loans and 18.4% in revolving loans.
“Half of the amount was granted through credit intermediaries, with most of these entities in the market having increased relative to 2019,” BdP said.
As for the cost of credit, it decreased slightly, measured by the market average Annual Percentage Rate of Charge in the fourth quarter, which was down 0.1 percentage points year-on-year.
“This reduction reflected decreases in the cost of revolving and car loans, partially offset by the increase in the average Annual Percentage Rate of Charge on personal loans,” the central bank said.