An overview of the consumer credit market in Ireland

Edward Gaffney and Paul Lyons
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Edward Gaffney: Central Bank of Ireland
Paul Lyons: Central Bank of Ireland

No 1/FS/24, Financial Stability Notes from Central Bank of Ireland

Abstract: This Note examines the non-mortgage consumer credit market in Ireland, which represents just over one-tenth of all household creditin Ireland. Consumer credit has trended upwards since 2016, within a context of overall deleveraging in the household sector. Consumer credit is characterised by smaller amounts, more diverse purposes and a broader range of lenders than the mortgage market. While banks continue to have a large share of outstanding consumer credit, credit unions, collectively, are the main lender for personal loan products. A large, stable share of lending also originates from other non-bank financial intermediaries. Consumer debt servicing costs have not increased significantly since the ECB started to raise interest rates in July 2022. Additionally, the pass through of interest rate increases to new consumer loan rates has been more muted in Ireland than elsewhere in the euro area. Furthermore, overall non-performing consumer loans at banks and credit unions remain near recent historical lows despite a slight increase observed in new early arrears cases.

Date: 2024-03
New Economics Papers: this item is included in nep-ban, nep-eec and nep-eur
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