The French borrow less and less, an unprecedented trend that causes many questions about the country's economic dynamics. For the past six years, the contraction of the credit market has been translated both for the prudence of households and the structural difficulties of real estate and consumption. The credit detention rate has fallen at its lowest level for more than thirty years, a situation which even exceeds the shock wave caused by the subprime crisis in 2008. However, the first gleams of a rebound in 2025 emerge , fed by a gradual improvement in the financial situation of households.
A historical collapse of credit in France
The credit market has recorded an unprecedented decline, with more than a million less loans since 2019, according to the Household Credit Observatory (OCM). This figure illustrates an even more marked contraction than after the 2008 financial crisis, where the decline was limited to 660,000 credits. The credit detention rate fell to 41.9 % in 2024, against 42.7 % the previous year and 47.4 % in 2019, which has reached its lowest level for more than three decades. Indeed, “the French delay their purchasing decisions and postpone their investment projects”, analyze Maya Atig, Director General of the French Banking Federation (FBF), and Solenne Lepage, General Delegate of the French Association of Financial Companies (ASF).
The fall in consumer credits is even more marked. Only 19 % of households have consumer credit in 2024, compared to 20.9 % in 2023 and 26.5 % in 2019, a historically low threshold since 1989. This decline is explained by the slowdown of the real estate market, reducing the financing needs, but also by a drop in purchases of household equipment, automobiles and renovation works. Economic uncertainty thus pushes households to postpone their expenses, and to wait for a more favorable situation.
Towards a gradual recovery in 2025?
Despite this credit contraction, some indicators suggest a possible improvement. Inflation slowed down 2 % in 2024, which offers a slight respite to the purchasing power of households. In addition, 85.4 % of borrowers today estimate their supportable reimbursement expenses, which reflects a gradual return to financial stability. However, this increased prudence is also fueled by uncertainties linked to the job market and post-Cavid economic consequences.
The prospects for this year 2025 have a slight resumption of subscription intentions. According to the OCM, consumer credits should increase at 3.7 % in the first half of 2025 (compared to 3.5 % in 2023), while real estate credits should go up to 3.1 % (against 2.8 % in 2023). Although this rebound remains moderate compared to historical averages, it testifies to a gradual return of confidence. However, this recovery could be hampered by external factors, in particular political developments and the stability of the labor market.
If the fall in credit in France reflects unprecedented prudence of households, the first signals of a reversal begin to appear. Improvement of the financial climate could promote a gradual recovery during this year 2025, although it remains conditioned on the evolution of the economic and political context. For credit and real estate market players in France, the coming months will be decisive to confirm or deny this trend.
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