Consumer finance new business grew by 116% in May

New figures released by the Finance & Leasing Association (FLA) show that consumer finance new business grew by 116% in May 2021 compared with the same month in 2020.  In the first five months of 2021, new business was 15% higher than in the same period in 2020.

The retail store and online credit sector reported new business up by 23% in May compared with same month in 2020, and growth of 11% in the first five months of 2021.  The credit card and personal loan sectors together reported new business up by 63% in May compared with the same month in 2020, but remained 1% lower in the first five months of 2021 than in the same period in 2020.

Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said “The recovery in the consumer finance market continued in May as consumers have become more optimistic of a strong economic recovery. The significant growth rates reported in April and May reflect the impact on new business levels of restrictions to deal with Covid-19 during the first lockdown and we expect these to moderate in the coming months.”

“Risks to the recovery remain from ongoing restrictions that may be needed to deal with the pandemic, the impact on confidence and unemployment once Government support schemes end, and increasing inflationary pressures. Nevertheless, we currently expect the industry to return to more normal new business levels during the second half of 2021.”

New consumer credit lending

	May 2021	% change on prev. year	3 months to May 2021	% change on prev. year	12 months to May 2021	% change on prev. year
Total FLA consumer finance (£m)	8,382	116	25,279	63	90,516	-3
Data extracts:
Retail store and online credit (£m)	669	23	2,006	21	8,763	3
Credit cards & personal loans (£m)	3,972	63	11,238	34	40,833	-16
Second charge mortgages (£m)	84	309	253	74	748	-33
Car finance (£m)	3,325	385	10,795	134	36,292	16