Consumer finance companies reported a notable improvement in their assessment of the business environment during the fourth quarter of 2024, according to AFSA's latest Consumer Credit Conditions Index Survey (C3 Survey). The full report is scheduled for release later this week.
The survey, conducted quarterly, gathers insights from respondents on the current business situation and their expectations for changes in consumer lending over the next six months. This includes factors such as consumer loan demand, lender funding costs, and loan performance. Participants comprise lenders offering traditional installment loans, vehicle financing, and other types of consumer loans. The most recent survey was conducted in January 2025.
Findings from the Fourth Quarter C3 Index survey indicate consistently positive expectations among lenders across all business indicators. Twice as many respondents noted an improvement in overall business conditions during the last three months of 2024 compared to those who reported a decline. The Net Increasing Index (NII), which measures the percentage of lenders reporting improved conditions minus those reporting weakened conditions, rose for the fourth consecutive quarter to +21.4. In contrast, it was +4.9 in the third quarter and negative earlier in 2024.
Looking ahead to the first half of 2025, optimism appears even stronger. A five-to-one margin exists between respondents expecting better business conditions versus those anticipating deterioration over the next six months. The NII reached +50.0—the highest since the survey began four quarters ago—up from +18.9 recorded in Q3.
These results align with projections for steady economic growth and a generally healthy job market throughout 2025, along with improving financial conditions and clearer financial regulations.
A review of last quarter’s survey is available for further details.
February 10th, 2025