The impact of consumer credit on the stability of the banking system: analysis of economic and psychological factors

The purpose of the research is to determine the impact of consumer lending on bank sustainability and to assess its dependence on economic indicators.

Methodology. The research methodology is based on qualitative and quantitative approaches. The methods of regression analysis, transformation of analytical data mapping, analysis and synthesis were used in the article.

Originality / value of the research lies in the fact that the authors have determined the dependence of consumer lending on both macroeconomic and psychological factors on the basis of calculations.

Findings. The authors, through econometric calculations, obtained the consumer function as the main indicator of aggregate demand, which affects economic growth. They revealed a low dependence of consumer credit on: interest rate, average monthly income of the population and inflation. The result of multiple regression showed that macroeconomic factors explained only 43,3 % of consumer credit growth. Along with this, the authors identified a significant impact of consumer credit on imports and gross value added of trade.

Based on qualitative analysis, the authors calculated the Consumer Sentiment Index (CCI), based on a survey of 128 respondents. The survey found that consumers are optimistic and highly susceptible to psychological instruments of influence, such as marketing and promotions. Also, the authors believe that the perception of debt burden and credit availability influenced the dramatic growth of this banking product.

Arguing their assumptions by citing contemporary research by economists, the authors determined that changes in demand for consumer credit are determined more by psychological factors than economic ones. The increase in household final expenditures was due to an increase in consumer credit, which stimulated aggregate demand in the short run and thereby influenced economic growth. At the same time, in recent years in Kazakhstan, lending to households has outpaced lending to industries and the ratio of household debt to GDP has been increasing. This trend may lead in the long run to bank defaults and economic recession in the country. Based on this, the authors have proposed some recommendations to address these problems.

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