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What is the state of the consumer credit market in Spain?

The size of the consumer credit market served by the banks in Spain is estimated at €61bn, whereas there is no reliable data on the market volume served by other credit providers. The volume of consumer credit increased rapidly in the period of fast economic expansion in 1997-2007, when the market increased by 3.5 times and total consumer credit outstanding peaked at €103bn in 2007. Since then the period of rapid deleveraging set in that lasted until 2014.

After years of decline the growth in consumer credit in Spain has now started to pick up and in 2015 a 6% increase was witnessed compared to the year before. However, the market remained one of the most downsized ones with volume outstanding compared to the peak in 2007 being still 40% lower.

Due to the weakness of the local banks in the aftermath of the financial crisis when a growing amount of non-performing loans and clean-up of the balance sheets did not enable to extend credit to consumers, the credit volume granted by foreign banks and institutions has increased. This has also opened a window of opportunity for alternative lenders offering credits online. Marketplace lending has also developed fast with a number of companies focusing on business loans and property with only a few providing unsecured consumer loans, where Bondora is the leader.

The main alternative credit providers besides marketplace lenders in Spain are Cofidis, 4Finance, Ferratum Group, Novum Bank, Kreditech and several local companies.

Credit providers in Spain are not required to obtain a license, but are entitled to follow the regulations in consumer protection, data protection and anti-money laundering.