New figures released by the Finance & Leasing Association (FLA) show that consumer finance new business fell in June 2020 by 17% compared with the same month in 2019, and contracted by 25% in the first half of 2020.
Credit card and personal loan new business together fell in June 2020 by 29% compared with the same month in 2019, and decreased by 20% in the first six months of 2020. Retail store and online credit new business was 7% lower in June than in the same month in 2019, and contracted by 11% in the first half of 2020.
Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said:
“FLA members provided £6.9 billion of new credit to consumers in June, up from a crisis-low of £3.1 billion in April. The partial recovery in new business levels reflects the gradual opening up of the economy, and continued household caution as the outlook for employment and the development of the virus remains uncertain.
“This uncertainty means that consumer finance providers face a prolonged period of significant demand for forbearance. To provide this and meet pent-up demand for new credit, we continue to urge the Government and Bank of England to extend financial support schemes to all lenders, including non-banks.”
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