New figures released by the Finance & Leasing Association (FLA) show that consumer finance new business fell in July 2020 by 9% compared with the same month in 2019, and decreased by 23% in the first seven months of 2020.
Retail store and online credit new business grew by 1% in July compared with the same month in 2019, but remained 9% lower in the first seven months of 2020 than in the same period in 2019. Credit card and personal loan new business together fell in July 2020 by 29% compared with the same month in 2019, and contracted by 22% in the first seven months of 2020.
Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said:
“The consumer finance market is gradually recovering, with both the consumer car finance and retail store and online credit sectors reporting growth in July. The pick-up in the economy since June has been encouraging, but the sustainability of the recovery is in doubt. Our latest research suggests that the overall consumer credit market in the UK is likely to see new lending fall by around 21% in 2020 as a whole.
“Consumer finance providers are facing a prolonged period of providing forbearance as a result of the crisis. We continue to urge the Government and Bank of England to ensure that there is adequate support for all lenders so that they can meet the demand from customers for both forbearance and new credit during what will be a difficult period for the economy.”
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