Consumer credit market declines - Money - News - Moneyfacts

News

Moneyfacts.co.uk News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Consumer credit market declines

Consumer credit market declines

Category: Money

Updated: 30/09/2009
First Published: 30/09/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The credit sector appears to be stabilising but consumers face having fewer choices when looking to borrow money, figures published by the Finance and Leasing Association (FLA) suggest.

New business written by members of the FLA, which provide secured and unsecured loans, credit and store cards, and motor finance, fell by 17 per cent in July, compared with the same month last year, suggesting a stabilisation in the sector.

In total, approximately £4.37 billion was lent to consumers by its members.

In the three months to July, new customer finance business was 16 per cent lower than it was during the same period in 2008 – similar to the rates reported in May and June.

However, annual comparisons are still some £11 billion down on last year, with store instalment credit the only area to rise.

The secured loan sector has diminished in particular, with lending in this market down by 83 per cent in the last three months.

There is also the fear that pressures to decrease the size of the sector could lead to the introduction of regulation that may mean consumers actually face less choice when looking to borrow money, which could lead desperate consumers turning to unauthorised lenders.

The FLA's Russell Hamblin Boone told Moneyfacts.co.uk: "The industry urgently needs a period of stability to allow changes already made to bed down.

"Over regulation will exacerbate the problems of an already shrinking market. It will result in more financial exclusion, as access to credit is reduced by more risk-averse lenders and restriction in wholesale funding.

"We have anecdotal evidence that suggests more people are turning to loan sharks in the current climate."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Have your financial habits changed?

2016 was certainly a turbulent year, and it's had a notable impact on household finances. Indeed, research shows that recent events have influenced the way over half of UK respondents manage their finances, with many becoming more cautious.

Kids got £180 in pocket money in 2016

New research has revealed that kids aged 4-14 received an average of £180.44 in pocket money over the last year, which was topped up by an additional £47 on average received in cash over the Christmas period.

How much could it cost to get fit in 2017?

We’re almost a week into 2017, and hopefully, many of those New Year’s Resolutions are still going strong. Figures suggest that the most popular resolution is to achieve a healthier lifestyle, but just how much could that ambition set you back?
 
Close