New figures released today by the Finance & Leasing Association (FLA) show that consumer finance new business fell in March 2020 by 16% compared with the same month in 2019, and contracted by 4% in Q1 2020 as a whole.
Credit card and personal loan new business together fell in March 2020 by 10% compared with the same month in 2019, while retail store and online credit new business was 6% lower over the same period.
Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “The strength of online purchases since the lockdown meant that the retail store and online credit sector reported a relatively modest fall in new business in March. Our latest research suggests that this sector is likely to see new business fall by 12% in 2020, while UK new consumer credit overall is expected to contract by 15% compared with 2019.
“The FLA urges further action by the Government and Bank of England to extend financial support schemes to all lenders, including non-banks, so that they can meet the huge demand for forbearance and continue to provide new lending. This will also ensure that the consumer finance market remains diverse, innovative and competitive after the crisis.”