Latest figures released by the Finance & Leasing Association (FLA) show that consumer finance new business grew by 7% in June 2022 compared with the same month in 2021. In the first half of 2022, new business was 24% higher than in the same period in 2021.
The credit card and personal loan sectors together reported new business up by 19% in June compared with the same month in 2021, while the retail store and online credit sector reported new business in June at a similar level to the same month in 2021.
Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said “The consumer finance market continued to report new business growth in June, but the rate of growth eased as the post-pandemic boost to activity waned and pressures on household incomes from higher inflation, interest rates and taxes weighed on consumer confidence and spending.”
“We expect growth in new business to slow in the coming months. Our Q3 2022 industry outlook survey suggests half of consumer finance respondents expect new business growth over the next year, down from two-thirds in the Q2 2022 survey.”
“As always, customers who are concerned about meeting payments should speak to their lender as soon as possible to find a solution.”
Commenting on the data, Michael Davidson, Chief Revenue Officer at Freedom Finance said: “A well-functioning consumer credit market is likely to become more important as we head into a challenging winter for the nation’s finances.”
“The lending industry has a vital, positive role to play in helping people manage their money through soaring energy bills and income-sapping inflation.”
“It is crucial that people are making the credit market work for them through this difficult period. This involves getting the right credit products for their needs by shopping around and using online marketplaces to get the best rates. Borrowers should also be ensuring they are certain that they are eligible for products before applying by using soft-search technology. This will help them receive offers personalised to their situation and lifestyle to support and improve their finances.”
“Demand for credit is clearly growing and it’s critical that consumers also plan their finances as well as they can. Budgeting well in advance, checking for any unclaimed benefits, reducing where possible any outgoings. If at any time it looks like they will struggle to meet payments for any credit, contact the lender as soon as possible as they are obliged to help.”
New consumer credit lending