New figures released today by the Finance & Leasing Association (FLA) show that consumer finance new business fell in August 2020 by 11% compared with the same month in 2019, and contracted by 21% in the eight months to August 2020.
Consumer car finance new business grew in August by 8% compared with the same month in 2019. Retail store and online credit new business fell by 1% over the same period. Credit card and personal loan new business together fell by 24% in August 2020 compared with the same month in 2019.
Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “The latest figures show the underlying strength of the consumer car finance and retail store and online credit sectors despite the disruption caused by the Covid-19 crisis. By contrast, the personal loans and credit card finance sectors remain subdued compared with pre-crisis levels.
“The outlook for demand and employment in the near term is highly uncertain as new restrictions are imposed to deal with the ongoing crisis. It is more vital than ever that the Government and Bank of England support all lenders, including non-banks, by removing obstacles that still exist around access to funding. This will ensure that the consumer finance industry is able to meet the ongoing demand for forbearance and new credit.”