In the context of expanding domestic demand and promoting consumption, consumer loans are gradually becoming the focus of competition among major banks. At present, at the critical moment of the "good start" of the banking industry, in order to compete for market share, major banks have tried to reduce loan interest rates, extend the loan cycle and increase the loan amount through diversified means such as issuing coupons and organizing groups. In particular, it is worth noting that some city commercial banks and joint-stock banks have reduced the annualized interest rate of consumer loans to below 3%, and the loan amount has been increased to one million yuan.
For the banking industry, such changes are not accidental. First, it is a positive response to the Notice on Financial Support for the Recovery and Expansion of Consumption, issued in September last year. The circular clearly requires banks to reduce the cost of household consumption in order to promote the recovery of the economy and the expansion of consumption. Second, it is also an important means for banks to use low interest rate strategies to compete for market share. In the current market environment, consumer lending has become a new battlefield for banks to compete, and by lowering interest rates and increasing quotas, banks can attract more high-quality customers, thereby increasing their business scale and market share.
However, this low-interest-rate, high-amount consumer lending strategy is not without its risks. In fact, as interest rates continue to fall and loan maturities extend, banks may face a mismatch between returns and risks. At the same time, as a kind of credit loan, the difficulty and cost of monitoring the flow of funds are relatively high, which puts forward higher requirements for the management ability of banks. Therefore, banks must fully consider their own risk tolerance and take corresponding risk management measures when implementing this strategy.
Judging from the current market situation, the low-interest rate consumer loan strategy has achieved certain results. According to the monitoring data of the Rong 360 Digital Technology Research Institute, in November 2023, the minimum executable average interest rate of online consumer loans of national banks has dropped to 341%, down nearly 80 basis points from a year ago. The annual interest rate of consumer loans of some banks has even dropped to below 3%, and the lowest can be as low as 288%。This strategy of low interest rates has not only attracted a large number of consumers, but also promoted the rapid growth of consumer loans.
However, for consumers, when choosing consumer loan products, they also need to do what they can and carefully assess their repayment ability and actual needs. While low interest rates and high amounts of consumer loans may seem tempting, if not rationally controlled, they can lead to repayment pressure and even debt distress. Therefore, when choosing a consumer loan product, consumers should fully understand the key information such as the interest rate, term, and amount of the product, and make an informed decision based on their actual situation.
At the same time, the regulatory authorities also need to strengthen the supervision of the consumer loan market to prevent the occurrence of excessive borrowing and illegal operations. In recent years, a number of banks have received regulatory fines for violating personal loan business regulations, which fully demonstrates the importance that regulators attach to the consumer loan market. In the future, the regulatory authorities will continue to intensify inspections to ensure the healthy and orderly development of the consumer loan market.
As for whether this low-interest rate consumer lending strategy can be sustained, and how much room for decline there is, it depends on a combination of factors. On the one hand, with the continuous downward movement of the market interest rate pivot and the support of macro policies, there is still a possibility of further decline in consumer loan interest rates. On the other hand, banks also need to consider their own returns and risk tolerance, and avoid excessive competition leading to lower returns or even losses. In addition, with the change of market supply and demand and the increase of consumer demand, the downside of consumer loan interest rates may also be restricted to a certain extent.
To sum up, in the context of expanding domestic demand and promoting consumption, consumer loans are becoming a new focus of competition in the banking industry. However, when implementing a low-interest rate and high-limit consumer loan strategy, banks need to fully consider their own risk tolerance and market changes, and adopt reasonable risk management measures. At the same time, consumers also need to be rational about consumer loan products and make informed decisions based on their actual situation. Regulators also need to strengthen supervision to ensure the healthy and orderly development of the consumer loan market.