Datagraphic - Debt: The Developed, Developing Dichotomy

Debt (external and public) has been cited as a central factor dragging global economic growth down between 2008 and 2012. Following the 2007/2008 global financial crisis a major imbalance in debt levels between developed and developing economies emerged. High debt levels in developed economies have stifled growth as consumer expenditure, investor confidence and employment have declined, while lower levels of debt in developing economies have supported stronger growth.

Debt Levels in Selected Countries



Note: External and public debt figures for India and Brazil are equivalent.

Five Consumer Lending Innovations Focus on Improving Borrowing Process

Analyst Insight by Michelle Evans, Consumer Finance Analyst at Euromonitor International

In the aftermath of the global economic crisis, many governments focused on new legislation to protect consumers from predatory lending practices and to educate them about steps they could take to ensure responsible lending. In addition, some lenders implemented new creative approaches to help better determine the credit worthiness of a potential consumer or to speed up the approval process.

Here are some of the latest examples of innovative approaches in the consumer lending space:

Hungary —“Show your credit card” personal loan

Budapest Bank in Hungary is offering a personal loan to any embossed credit card holder – even a customer of another bank – who is willing to present the credit card and bank statements from the last three months as a way to speed up the approval process. Budapest Bank is willing to give the same amount in a personal loan as the cardholder's approved credit card line.

Double-Dip Recession Fears for the UK

Estimates from UK national statistics predict that the economy dipped back into recession in Q1 2012 after a second quarter of negative growth. However, Euromonitor International predicts a slightly stronger first quarter result of 0.1% growth quarter-on-quarter, although the prospects for 2012 overall remain weak.

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Hungary’s Consumer Lending Environment to Dictate the Pace of Recovery of the Car Market

By historical standards and even compared to most of its neighbours, demand for new cars in Hungary has been in the doldrums since 2009. Sales have remained far below what they should be when considering the number of households that have enough disposable income to be in the market for a new car. Click to tweet! Even movements in consumer confidence levels have had no impact on new car sales since the financial crisis began.

Fundamentally, sales have remained slow because of the tighter consumer lending environment and a change in consumer attitude towards debt. The new vehicle registration tax structure intended to stimulate demand will therefore undoubtedly have a limited impact in 2012, particularly in light of the 2012 hike in the top rate of VAT to 27%. That said, however, new car sales will eventually begin to climb in the coming years as long as the capacity of Hungarian consumers to take on debt improves.

Assessing Card Payment Growth for 2012

Analyst Insight By Jon Fisher, Global Head of Consumer Finance Research 

Emerging markets account for all of the slots on Euromonitor International’s list of the top 10 card payment growth markets for 2012. While this is certainly not a surprise, what is important to note is the shift happening among emerging markets for card payment leadership status. The BRICs’ long domination of the card payment growth storyline appears to be giving way a bit to the rise of powerful growth stories in markets such as Vietnam, Turkey and the Philippines. The BRICs may own the absolute volume advantage, but these markets possess compelling growth stories.

In Vietnam, pre-paid is expected to be the strongest category in the short term as closed loop transportation cards benefit from a move to modernize the transportation system. Even with the high growth of plastic, cash remains the most popular payment instrument. For 2012, Euromonitor expects cash to account for roughly 75% of all consumer payment volume. Tweet this!

Assessing the Payment Landscape in the Developed Markets

While a vast amount of the expected payment growth lies in emerging markets, the potential of developed markets should not be overlooked. The more developed regions of North America and Western Europe accounted for 62% of the total US$11.6 trillion in card payment volume in 2011. Tweet this!  Moreover, the developed markets continue to exhibit substantial payment growth. Both the developed and emerging markets each contributed roughly US$2.0 trillion to the absolute card payment volume over 2006-2011.

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Worldwide Growth in Card Payment

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Financial cards continue to gain momentum worldwide, particularly in emerging markets. Michelle Evans, consumer finance industry analyst at Euromonitor International, states that Vietnam, Turkey, and the Philippines are projected to be the three fastest growing markets for card payment volume in 2012. Card functions like debit and pre-paid continue in their popularity, and debit has grown extensively due to efforts by both public and private sectors to reach the unbanked population of the world.

 

5 Markets to Watch for Card Payment Growth in 2012

Analyst Insight by Michelle Evans 

Euromonitor International took a look at the 5 markets that are expected to show the most card payment volume growth in 2012. Emerging markets tell the growth story. The list of fastest-growing countries includes both small card markets like Vietnam, which remains very much in its infancy stage of development, to China, which is growing fast into a major card player on the global stage. Debt-free products like debit and pre-paid cards are the two card functions carrying much of the growth in these markets.

1. Vietnam

• 2012-13 card payment volume: 28%
• 2012-16 card payment volume CAGR: 19%
• 2012 card payment volume: US$9.0 billion
• 2016 no. of cards in circulation: 54.9 million

Out of the countries researched by Euromonitor International, Vietnam is projected to be the fastest growing market for card payment volume over the next year.

Request a Free Webinar: Assessing Key Emerging Payment Dynamics and Drivers

Speakers: Jonathan Fisher, Head of Consumer Finance Research & Kendrick Sands, Consumer Finance Company Analyst

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Description: While vast challenges serve as headwinds for the global economy, financial cards continue to siphon payment volume share from paper. Buoyed by a host of drivers, electronic payments appear well positioned to enlarge its piece of the consumer payment market. The presentation aims to highlight the key dynamics at play in the payment landscape and offer insight into how they may develop. With a global focus, viewers will gain an understanding of potential winners and losers among payment instruments, markets, companies, consumer trends and channels, 2012 to 2016. 

• Learn how the tug-of-war between debit and credit may evolve 
• Understand how payment drivers such as urbanization spur card usage 
• Discover the markets best positioned to increase spending versus those likely to pull back

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Euromonitor webinars help businesses  learn about trends and opportunities in specific industries.

 

Assessing Key Emerging Payment Dynamics and Drivers

Wednesday, February 29, 2012 
9:00am CST,  10:00 AM EST, 3:00PM GMT

• Review the state of internet retailing, with particular focus on geographic growth opportunities between 2011 and 2016
• Focus on the BRIC markets examining opportunities these offer for domestic and cross border sales
• Examine how e-commerce has evolved in emerging markets to accommodate infrastructure obstacles and specific consumer demands

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Trends and Opportunities in Global FMCG Packaging
Wednesday, March 7, 2012 
9:00am CST,  10:00 AM EST, 3:00PM GMT

• Global retail FMCG packaging reached 3.9 trillion units in 2011 and is expected to grow by 3% in 2012
• Packaging that facilitates value offerings continue to resonate with consumers affected by economic uncertainly in Western Europe and North America. China continues to drive growth, accounting for 55 % of global FMCG packaging unit growth in 2011
• 2012 could see brand owners reducing pack sizes and pack material quality to offset food inflation and keep unit prices stable in packaged food

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Internet Retailing in Emerging Markets - Long Term Growth Opportunities in BRIC Countries
Thursday, March 22, 2012
10:00am CST,  11:00 AM EST, 3:00PM GMT

• Review the state of internet retailing, with particular focus on geographic growth opportunities between 2011 and 2016
• Focus on the BRIC markets examining opportunities these offer for domestic and cross border sales
• Examine how e-commerce has evolved in emerging markets to accommodate infrastructure obstacles and specific consumer demands

Register Here