Fernando Casero, president of the National Association of Financial Credit Establishments (Asnef), which is the employer that groups the entities specialized in consumer financing, predicts that in the coming months, predictably, there will be a rebound in delinquency in Spain, in a context of tightening of monetary policy at a global level that has resulted in a rapid and powerful escalation of interest rates.

Advance to THE WORLD the economic results of the financing industry in 2022. New investment in financing services grew by 21.8% compared to 2021, exceeding pre-pandemic levels by touching 30,000 million euros. "It's been a great exercise, with incredible results for the industry," he says. Despite the situation of "uncertainty", the data are "really positive", he stresses.

The results also show an increase in outstanding risk, which measures the total capital pending amortization, of 4.3%, to 32,410 million euros. An increase that, for Casero, is a reflection of the growth of the sector, which is acting as a "lever for the revitalization of consumption" in a context of recovery after the pandemic.

A point to understand the magnitude of this contribution to economic growth: as indicated in the report Socioeconomic and tax impact of financial credit institutions, prepared by PwC for Financial Credit Institutions, the financing granted by the sector amounted to 60,733 million euros in 2021, contributing almost 30,000 million to the national Gross Domestic Product (GDP).

The file of defaulters of Financial Credit Institutions, which includes those who have debts with any entity, is, in the opinion of its president, an "absolutely essential tool so that entities can maintain risk selection criteria in an adequate way" and contributes to avoid increasing delinquency and over-indebtedness with a "responsible" consumer credit.

Asked about the possibility of a rebound in delinquency and over-indebtedness in the current scenario of inflation and rate hikes, Casero indicates that "it is still early" to foresee it, because the data go with a certain decalaje, but warns that "there is no doubt that it is possible that a small increase in delinquency may operate". For now, he insists, "the ratios remain quite stable", at around 6%.

On revolving credit, which experienced a rise of 19.5% in 2022, reaching 15,357 million euros, Casero considers that the increase is in line with the global evolution of the sector and affects that, after the recent court rulings, the conditions and "litigation in this type of product, which has a certain function for a specific type of client to which it resolves its financial situation, have been clarified, It's gone down in a significant way."

In this sense, Casero recalls that in 2021 Asnef launched the Transparency Protocol for Revolving Credit, which ensures that the consumer has all the necessary information to make their decisions "freely, consciously, informed and responsibly". Currently, of the 11 associated entities that have revolving products in their portfolio, 8 have already adhered to the protocol.

Legislative challenges

With an eye on the short term, the leader of the employers' association that groups consumer finance companies warns that "we are facing an uncertain future and with numerous legislative and economic challenges." The sector is awaiting the revision of the directive that regulates consumer credit at European level and here Asnef is doing an important lobbying job so that the regulations force supervision by official bodies. They require that the financing activity be reserved exclusively for entities supervised by the Bank of Spain. "Same activity, same rules", insists Casero, who recalls that of the 667 fintech companies operating in Spain, only 95 entities are under the supervision of an official body.

At the national level, in Financial Credit Institutions there is a special concern for the new Financial Customer Defense Authority, a kind of supervisory agency that will unify the criteria for managing claims between customers and banks. The bill faces this week its last procedure in the Congress of Deputies and, with the forecast that it will be approved, Casero warns of the regulation proposed by the Government "is not the most appropriate", because "it can lead to much greater litigation". "It encourages the claims industry," he says.

He prefers not to venture into making forecasts. "We are in a period of uncertainty and there are contradictory variables," he says.

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