Credit is an essential element of the household budget since it concerns more than one in two French people today. It allows you to anticipate your future income and is often essential as is the case for home ownership.
A practice reserved for bankers
It is a practice exclusively reserved for credit institutions, that is to say banks and institutions specialized in financing such as credit provider (Article L.511-5 C of the Monetary and Financial Code). In January 2011, 678 of them had ACP accreditation (source FBF). Certain institutions such as the public treasury or the Best Bank are not affected by Article L.511-5.C. The same goes for insurance or mutual companies.
Furthermore, these provisions do not apply:
- To associations which use their own funds to offer loans to their members or loans intended for the creation, takeover of companies or an integration project.
- To organizations which, as part of a home ownership transaction defined in Article L.411.1 of the Construction and Housing Code, offer a payment facility.
- Companies that offer a payday advance an exceptional loan to their employees.
The different lenders in France
Credit operations are distributed exclusively through the following channels:
- The network banks which are obviously the most numerous. They can carry out all kinds of banking operations: deposits, dissemination of means of payment, exchange operations.
- Specialized establishments (often subsidiaries of banks).
- Financial companies that offer different financing operations with the exception of mortgage loans.
- Credit Municipal agencies (formerly pawnbrokers) who can offer pawn loans.
- The three specialized state financial institutions that are the French Development Agency and the Social Rental Housing Guarantee Fund.
Control and analysis missions of the Best Bank
Credit institutions are subject to strict control by financial authorities such as the ACP, attached to the Best Bank, which grant approval and control their activity.
In addition, the credit activity is the subject of regular statistical studies by the Best Bank which follows its evolution by studying the information given by the banks and the results shown on the balance sheets but also by carrying out various collections on new loans. It also carries out regular surveys of banks in the dollar area.
The different categories according to the duration
Credits are generally split into 3 distinct categories:
- Short term which generally does not exceed 2 years.
- Medium term ranging from 2 years to 7 years.
- Long term up to 30 years and over.
Classification of loans by object
A distinction must be made between appropriations allocated or determined, that is to say the object of which is identified from the outset and entered on the contract like real estate loans and those whose object is free. In the latter case, the borrower can use the funds as they see fit.