2022
0
Ireland Loans and Alternate Sources of Credit Market Report 2022
2022-02-17T03:05:00+00:00
OX1099649
1800
148029
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Report
en_GB
"While the onset of the COVID-19 pandemic severely disrupted the market for loans and credit products – and this disruption lasted for almost two years – it seems likely that…

Ireland Loans and Alternate Sources of Credit Market Report 2022

 1,800 (Excl.Tax)

Report Summary

“While the onset of the COVID-19 pandemic severely disrupted the market for loans and credit products – and this disruption lasted for almost two years – it seems likely that the end of the pandemic will bring about not just a return to pre-pandemic activity but added impetus to the demand for loans and credit.”
– Brian O’Connor, Senior Consumer Analyst

This Report looks at the following areas:

  • The impact of COVID-19 on consumer behaviour and market dynamics with regard to loans and alternative sources of credit
  • Ownership of credit and loan products among Irish consumers
  • When most recent loans were taken out and the outstanding amounts owing on these loans
  • Consumer plans to borrow in the next 12 months
  • Attitudes towards loans and lenders, and behaviours when it comes to looking for loans and paying off loans

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Issues covered in this Report
        • Executive Summary

            • The impact of COVID-19 on loans and alternative forms of credit
              • Figure 1: Short-, medium- and long-term impact of COVID-19 on loans and credit, 2022
            • The market
              • Figure 2: Outstanding credit advanced to households (excluding loans for home purchase), actual, estimated, forecast and projected, IoI, RoI and NI, 2017-26
              • Figure 3: Index of outstanding credit advanced to households (excluding loans for home purchase), actual, estimated, forecast and projected, IoI, RoI and NI, 2017-26
            • Market drivers
              • Both economies in strong post-COVID-19 recovery
                • Increased employment, consumer spending to create demand for credit
                  • Concern about COVID-19 waning, but still present among consumers
                    • Cost of loans stable but short-term credit more expensive in NI
                      • Cost of loans, credit cards and overdrafts relatively stable in RoI
                        • Who’s innovating?
                          • The consumer
                            • Approaching two thirds of consumers have unsecured debt
                              • Figure 4: Credit and loan products that consumers currently owe money on (excluding mortgages), NI and RoI, 2021
                            • 36% of consumers took out last loan within last year
                              • Figure 5: When consumers who currently have a loan took out their most recent loan, NI and RoI, 2021
                            • Almost two thirds of consumers with debt owe less than £5,000/€5,600
                              • Figure 6: Amount currently owed on credit/loan products (excluding mortgages), NI and RoI, 2021
                            • Almost a fifth of consumers likely to apply for a new loan
                              • Figure 7: How likely or unlikely consumers are to apply for a new personal loan in the next 12 months, NI and RoI, 2021
                            • Pandemic experience has made consumers wary of taking on debt
                              • Figure 8: Agreement with statements relating to the impact of COVID-19 on loans/borrowing, NI and RoI, 2021
                            • Shopping around behaviour strong among loan seekers
                              • Figure 9: Agreement with statements relating to loans and credit, NI and RoI, 2021
                          • The Market – Key Takeaways

                            • Both economies in strong post-COVID-19 recovery
                              • Increased employment, consumer spending to create demand for credit
                                • Concern about COVID-19 waning, but still present among consumers
                                  • Cost of loans stable but short-term credit more expensive in NI
                                    • Cost of loans, credit cards and overdrafts relatively stable in RoI
                                    • Market Size and Forecast

                                        • Short-, medium- and long-term impact on the industry
                                          • Figure 10: Short-, medium- and long-term impact of COVID-19 on loans and credit, 2022
                                        • Outstanding credit to Irish households under €18.5 billion in 2021
                                          • Figure 11: Outstanding credit advanced to households (excluding loans for home purchase), actual, estimated, forecast and projected, IoI, RoI and NI, 2017-26
                                        • Both markets set for relatively robust recovery
                                          • Figure 12: Index of outstanding credit advanced to households (excluding loans for home purchase), actual, estimated, forecast and projected, IoI, RoI and NI, 2017-26
                                      • Market Drivers

                                        • RoI economy back on track after disruption of COVID-19
                                          • Figure 13: Economic growth, GDP and MDD, actual and forecast, RoI, 2020-24
                                        • NI economy on course to grow strongly in 2022, less so thereafter
                                          • Figure 14: Economic growth, actual and forecast, NI, 2020-24
                                        • Boom in consumer spending likely to create demand for credit and loans
                                          • Figure 15: Consumption forecast, NI and RoI, 2022
                                          • Figure 16: Agreement with statement ‘I am cutting back on non-essential spending since the start of the COVID-19 outbreak’, IoI, NI and RoI, 2022
                                        • Employment growth will generate renewed demand for loans and credit
                                          • Figure 17: Employment forecast, RoI and NI, 2020-24
                                        • Consumers not as worried about COVID-19, but still concerned
                                          • Figure 18: Consumer response to ‘How worried are you about the risk of being exposed to the coronavirus (also known as COVID-19)?’, Ireland, 2021 and 2022
                                          • Figure 19: Consumer response to ‘To what extent are you worried about how the outbreak might affect your lifestyle?’, Ireland, 2021 and 2022
                                        • Cost of revolving credit up markedly on recent years in UK (including NI)
                                          • Figure 20: Interest rates, annual averages, %, overdrafts, UK (incl. NI), 2016-21
                                        • …whereas UK (including NI) loan rates have remained stable for several years
                                          • Figure 21: Interest rates, annual averages, %, personal loan of £5,000 and £10,000, UK (incl. NI), 2017-21
                                        • Cost of credit and loans relatively stable in RoI over recent years
                                          • Figure 22: Retail interest rates, annual averages, %, overdrafts, RoI, 2012-21
                                          • Figure 23: Retail interest rates, annual averages, %, consumer loans, RoI, 2012-21
                                        • Most consumers do not know what their credit card borrowings cost
                                        • Innovations – What You Need to Know

                                          • Technological advancements support credit applications
                                            • Companies cater to consumer interests
                                              • Consumers show interest in the benefits of green finance
                                              • Who’s Innovating?

                                                  • Streamlining the application process through technology
                                                    • Figure 24: Consumer attitudes towards technology, UK and Ireland, 2021
                                                  • Companies become more attentive to consumers
                                                    • Figure 25: Important factors when choosing a new loan, UK, 2021
                                                  • Loans that benefit the environment
                                                    • Figure 26: Consumer attitudes and behaviours towards ethical companies, UK and Ireland, 2021
                                                  • Guidance on supporting the environment through finance
                                                    • Figure 27: Consumer attitudes towards green, ethical and socially responsible finance, UK, 2021
                                                • Companies and Brands

                                                  • Banks
                                                    • Allied Irish Bank
                                                      • Key facts
                                                        • Product portfolio
                                                          • Recent developments
                                                            • Bank Of Ireland
                                                              • Key facts
                                                                • Product portfolio
                                                                  • Recent developments
                                                                    • Danske Bank
                                                                      • Key facts
                                                                        • Product portfolio
                                                                          • Recent developments
                                                                            • First Direct (NI only)
                                                                              • Key facts
                                                                                • Product portfolio
                                                                                  • Recent developments
                                                                                    • KBC Ireland (RoI only)
                                                                                      • Key facts
                                                                                        • Product portfolio
                                                                                          • Recent developments
                                                                                            • Nationwide (NI only)
                                                                                              • Key facts
                                                                                                • Product portfolio
                                                                                                  • Recent developments
                                                                                                    • Permanent TSB (RoI only)
                                                                                                      • Key facts
                                                                                                        • Product portfolio
                                                                                                          • Recent developments
                                                                                                            • Santander (NI only)
                                                                                                              • Key facts
                                                                                                                • Product portfolio
                                                                                                                  • Recent developments
                                                                                                                    • Credit Unions
                                                                                                                      • Dubco
                                                                                                                        • Key facts
                                                                                                                          • Product portfolio
                                                                                                                            • Recent developments
                                                                                                                              • Irish League of Credit Unions
                                                                                                                                • Key facts
                                                                                                                                  • Product portfolio
                                                                                                                                    • Recent developments
                                                                                                                                      • Life Credit Union (RoI only)
                                                                                                                                        • Key facts
                                                                                                                                          • Product portfolio
                                                                                                                                            • Recent developments
                                                                                                                                              • Payday Loan Providers
                                                                                                                                                • 118 118 Money (NI only)
                                                                                                                                                  • Key facts
                                                                                                                                                    • Product portfolio
                                                                                                                                                      • Personal Loan Providers
                                                                                                                                                        • Amigo Loans (NI only)
                                                                                                                                                          • Key facts
                                                                                                                                                            • Product portfolio
                                                                                                                                                              • Recent developments
                                                                                                                                                                • Avantcard (RoI only)
                                                                                                                                                                  • Key facts
                                                                                                                                                                    • Product portfolio
                                                                                                                                                                      • Recent developments
                                                                                                                                                                        • Chill Money (RoI only)
                                                                                                                                                                          • Key facts
                                                                                                                                                                            • Product portfolio
                                                                                                                                                                            • The Consumer – Key Takeaways

                                                                                                                                                                              • Approaching two thirds of consumers have unsecured debt
                                                                                                                                                                                • 36% of consumers took out last loan within last year
                                                                                                                                                                                  • Almost two thirds of consumers with debt owe less than £5,000/€5,600
                                                                                                                                                                                    • Almost a fifth of consumers likely to apply for a new loan
                                                                                                                                                                                    • Ownership of Credit and Loan Products

                                                                                                                                                                                        • Majority have some form of unsecured debt or car loan
                                                                                                                                                                                          • Figure 28: Credit and loan products that consumers currently owe money on (excluding mortgages), NI and RoI, 2021
                                                                                                                                                                                        • Middle-aged consumers least inclined to be debt-free
                                                                                                                                                                                          • Figure 29: Consumers who do not currently owe any money on any credit or loan product (excluding mortgages), by age and social class, NI and RoI, 2021
                                                                                                                                                                                        • Strong correlation between having young children and being in debt
                                                                                                                                                                                          • Figure 30: Consumers who do not currently owe any money on any credit or loan product (excluding mortgages), by children in the household, NI and RoI, 2021
                                                                                                                                                                                        • Credit card debt common among most demographics
                                                                                                                                                                                          • Figure 31: Consumers who currently owe money on a credit card, by age and social class, NI and RoI, 2021
                                                                                                                                                                                        • Personal loan ownership highest among 34-44 year olds
                                                                                                                                                                                          • Figure 32: Consumers who currently owe money on a personal loan, by age, NI and RoI, 2021
                                                                                                                                                                                      • When Loans Are Taken Out

                                                                                                                                                                                          • Just over a third took out last loan within last year
                                                                                                                                                                                            • Figure 33: When consumers who currently have a loan took out their most recent loan, NI and RoI, 2021
                                                                                                                                                                                        • Amounts Owing on Loans

                                                                                                                                                                                            • 62% in NI; 64% in RoI owe less than £5,000 (NI)/€5,600 (RoI)
                                                                                                                                                                                              • Figure 34: Amount currently owed on credit/loan products (excluding mortgages), NI and RoI, 2021
                                                                                                                                                                                          • Future Borrowing Intentions

                                                                                                                                                                                              • Almost one in five likely to apply for a loan in the next 12 months
                                                                                                                                                                                                • Figure 35: How likely or unlikely consumers are to apply for a new personal loan in the next 12 months, NI and RoI, 2021
                                                                                                                                                                                              • ABC1s and high earners most likely to be considering new loan
                                                                                                                                                                                                • Having young children a major driver for loans
                                                                                                                                                                                                  • Figure 36: How likely or unlikely consumers are to apply for a new personal loan in the next 12 months, by presence of children in the household, NI, 2021
                                                                                                                                                                                                  • Figure 37: How likely or unlikely consumers are to apply for a new personal loan in the next 12 months, by presence of children in the household, RoI, 2021
                                                                                                                                                                                              • The Impact of COVID-19 on Loans and Credit

                                                                                                                                                                                                  • Pandemic experience has made consumers wary of taking on debt
                                                                                                                                                                                                    • Figure 38: Agreement with statements relating to the impact of COVID-19 on loans/borrowing, NI and RoI, 2021
                                                                                                                                                                                                  • Reluctance to borrow due to COVID-19 highest among younger consumers
                                                                                                                                                                                                    • Need for additional credit highest among younger consumers
                                                                                                                                                                                                    • Attitudes towards Loans and Credit

                                                                                                                                                                                                        • Most consumers would shop around before taking out a loan
                                                                                                                                                                                                          • Figure 39: Agreement with statements relating to loans and credit, NI and RoI, 2021
                                                                                                                                                                                                        • Tendency to regularly check for better rates common among men, ABC1s and 18-54s
                                                                                                                                                                                                          • Consumers confident they would be accepted for loan
                                                                                                                                                                                                            • Current account providers in strong cross-selling position
                                                                                                                                                                                                              • Figure 40: Agreement with the statement ‘I would prefer to take out a loan with my main current account provider than use another provider’, by gender, age and social class, NI and RoI, 2021
                                                                                                                                                                                                            • Personal loans not the first resort for majority of consumers
                                                                                                                                                                                                              • Figure 41: Agreement with statement ‘It is better to find other ways to borrow money than apply for a personal loan’, by age and gender, NI and RoI, 2021
                                                                                                                                                                                                            • Majority of borrowers look to repay debts as quickly as possible
                                                                                                                                                                                                              • Figure 42: Agreement with statement ‘I typically try to make early repayments on loans’, by gender and age, NI and RoI, 2021
                                                                                                                                                                                                            • Consumers split over trustworthiness of lenders
                                                                                                                                                                                                              • Figure 43: Agreement with statement ‘Loan providers can be trusted to be transparent about fees’, NI and RoI, by gender, age and social class, 2021
                                                                                                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                            • Data sources
                                                                                                                                                                                                              • Generational cohort definitions
                                                                                                                                                                                                                • Abbreviations

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