The National Bank’s Central Credit Register sees COVID-19-related drop in borrowing

Lending to private individuals was strongly influenced by the COVID-19 crisis last year. According to the annual statistics for 2020 released by the National Bank’s Central Individual Credit Register, 17.8 % fewer new consumer loans and mortgages were granted than in 2019.

Fewer loans

Anyone who concludes a consumer credit or mortgage loan contract in Belgium is automatically listed in the Central Individual Credit Register, which is run by the National Bank. At the end of last year, 6 199 991 borrowers were recorded in it, for a total of 10 677 273 loans (‑1.3 %).

The COVID-19 crisis had had major repercussions for the number of new loans registered by the National Bank. It was above all during the first lockdown decreed in the second half of March, with the compulsory closure of physical retail outlets and the other restrictive measures imposed in a bid to stem the spread of the virus, that loan applications collapsed.

For instance, in April, the Central Credit Register recorded almost 70 % fewer instalment loans and new credit lines than during the same month one year earlier. From the Summer onwards, the lending process was gradually relaunched, without however getting back to its normal level. On an annual basis, new credit lines and instalment loans experienced a decline of, respectively, 29.6% and 18.7 %. The drop in mortgages came to 14.8 %, but this trend should be qualified because an exceptionally high volume of mortgage loans had been recorded in 2019 in anticipation of the scrapping of the housing bonus in Flanders at the end of the year.

Fewer payment defaults

At the end of 2020, a total of 315 165 people together accounted for 452 890 payment defaults recorded in the Central Credit Register, which corresponds to respective declines of 6.3 % and 7.3 %. The number of new payment arrears recorded during the course of the year has even fallen, reaching 18.2 %. In the case of 102 968 loans, it was the first time that any payment arrears had been notified.

These figures obviously cannot be dissociated from the possibility of getting a temporary payment delay on account of the COVID-19 crisis. In order to give the economy a boost in these exceptional circumstances and to protect businesses and households as far as possible, the government has adopted a series of support measures.

One of these measures enables consumers to obtain, under certain conditions, a payment delay for reimbursement of their loan. This option has been widely taken up for mortgages in particular (+/- 145 000 credit files), which is not at all surprising considering the high monthly repayment burden associated with this type of loan. These payment deferrals are also listed in the Central Credit Register. All the same, it is worth noting that the law expressly stipulates that they cannot led to any record of payment arrears.

Fewer consultations

Lenders consulted the Central Credit Register 7.2 million times last year. This 14.8 % drop on 2019 is also the result of lower personal loan applications caused by the COVID-19 crisis. On average, the Central Credit Register was consulted 26 543 times per working day. In 6 % of all cases, the person whose data were consulted had payment arrears or a collective debt settlement procedure registered in their name.

Likewise, 377 504 requests from consumers wanting to know their personal data were handled. In more than 85 % of all cases, these requests were made online.