Large differences in credit institutions’ interest rates on unsecured consumer credit
The average interest rate on new unsecured consumer credit1 granted by credit institutions rose from August, to 6.2% in September 2019. The interest rates on unsecured consumer credit vary considerably between credit institutions. In September 2019, the interest rate spread2 between the credit institutions was historically wide, 5.3 percentage points. A growing share of new unsecured consumer credit is being granted by credit institutions specialised in offering high-interest unsecured consumer credit. In September 2019, the average interest rate on new unsecured consumer credit granted by such institutions was over 11%.
New drawdowns of unsecured consumer credit3 in September 2019 amounted to EUR 274 million, an increase of EUR 40 million on the corresponding period a year earlier. In January–September 2019, the drawdowns increased by 6% on the same period in 2018. Due to the higher volume of drawdowns, the pace of growth of the stock of unsecured consumer credit (EUR 5.8 bn) has accelerated.
At the end of June 2019, the aggregate stock of consumer credit by households was estimated at EUR 22.6 bn. Of this, consumer credit granted by credit institutions was estimated to account for 71%, compared with 80% two years earlier. An increasing share of consumer credit is being granted by companies other than credit institutions operating in Finland.
Loans
Households’ new drawdowns of housing loans in September 2019 amounted to EUR 1.7 bn, up by EUR 200 million on the corresponding period a year earlier. At the end of September 2019, the stock of euro-denominated housing loans totalled EUR 99.6 bn and the annual growth rate of the stock was 2.3%. Household credit at end-September comprised EUR 16.4 bn in consumer credit and EUR 17.6 bn in other loans. New drawdowns of loans to non-financial corporations (excl. overdrafts and credit card credit) amounted in September to EUR 1.6 bn. The average interest rate on new corporate-loan drawdowns declined from August, to 2.36%. At the end of September, the stock of euro-denominated loans to non-financial corporations was EUR 89.6 bn, of which loans to housing corporations accounted for EUR 34.2 bn.
Deposits
The stock of deposits by Finnish households at the end of September totalled EUR 94.2 bn and the average interest rate on the deposits was 0.11%. Overnight deposits accounted for EUR 81.3 bn and deposits with agreed maturity for EUR 4.8 bn of the deposit stock. In September, households concluded EUR 0.2 bn of new agreements on deposits with agreed maturity, at an average interest rate of 0.27%.
1Excl. overdrafts and credit card credit.
2Covers 90% of monetary financial institutions in the 5th–95th percentile range.
3Excl. overdrafts and credit card credit.
Key figures of Finnish MFIs' loans and deposits, preliminary data
| July, EUR million | August, EUR million | September, EUR million | September, 12-month change1, % | Average interest rate, % | |
| Loans to households2, stock | 132,662 | 133,285 | 133,616 | 2,5 | 1,45 |
| - of which housing loans | 99,038 | 99,399 | 99,631 | 2,3 | 0,92 |
| Loans to non-financial corporations2, stock | 88,286 | 88,891 | 89,591 | 6,9 | 1,35 |
| Deposits by households2, stock | 97,390 | 98,370 | 98,561 | 7,7 | 0,11 |
| Households' new drawdowns of housing loans | 1,681 | 1,653 | 1,714 | 0,72 |
1 Rate of change has been calculated from monthly differences in levels adjusted for classification and other revaluation changes.
2 Households also include non-profit institutions serving households; non-financial corporations also include housing corporations
- Euro-denominated deposits and loans of euro area residents: stock, 12 month rate of change and average interest rate
- Euro-denominated loans and deposits of Finnish households
- New business on loans and new drawdowns of household loans
- Finnish contribution to the euro area monetary aggregates and their main counterparts
- Imputed interest rate margins on loans from MFIs
For further information, please contact:
Markus Aaltonen, tel. +358 9 183 2395, email: markus.aaltonen(at)bof.fi
Olli Tuomikoski, tel. +358 9 183 2146, email: olli.tuomikoski(at)bof.fi.
The next news release will be published at 1 pm on 2 December 2019.
Related statistical data and graphs are also available on the Bank of Finland website: https://www.suomenpankki.fi/en/Statistics/mfi-balance-sheet/.