Consumer lending in Portugal is expanding in 2023 amid rising interest rates and decline in households’ disposable incomes. Demand for mortgages is slowing down with card lending posting the most dynamic growth.
With costs of living escalating, credit consolidation is seen by many families as a solution to allow for some monthly savings. By consolidating credit, consumers are able to obtain better financing conditions.
The rapid increase in interest rates on mortgages that stems from the rise, since July 2022, of ECB interest rates to try to curb inflation, has left many Portuguese families in financial difficulty and has led to a slowdown in the search for new mortgage contracts. The vast majority of consumers have loans at a variable rate and indexed to Euribor, which rose several times during the year.
Buy Now Pay Later is growing, although still represents a small percentage of total other personal lending. On the market since 2021, Klarna introduced a new feature in 2023 allowing consumers to discover whether particular stores selling electronic devices are environmentally friendly or not.
The end of 2023 and the whole of 2024 are fraught with uncertainty. The rise in interest rates is expected to reach its full impact over the final months of 2023 and first months of 2024, with a consequent further decline in consumers’ purchasing power, slowing down consumer lending, particularly in 2024.
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Understand the latest market trends and future growth opportunities for the Consumer Lending industry in Portugal with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Consumer Lending
Aggregate of Consumer Credit and Mortgages/Housing. Gross Lending: The total value of loans advanced by institutions in a given year; data refers to single year only. Outstanding Balance: The collective amount owed by borrowers at the end of a given year; data refers to the cumulative impact of debt.
See All of Our DefinitionsThis report originates from Passport, our Consumer Lending research and analysis database.
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