Search

Payday loans decline more than 40 percent in three years

The volume of payday lending has decreased by more than 40 percent in the last three years, according to research from trade body the Consumer Finance Association (CFA).  

Share on Twitter Linkedin black

The research was conducted in partnership with the Social Market Foundation (SMF), a research and events firm, with input from two YouGov surveys.

 

It has provided an assessment of how the high-cost short term credit market has changed since the introduction of the price cap regulation in 2015.

 

This comes at the same time the Financial Conduct Authority (FCA) released a statement to say it would review the price cap on payday loans.

 

The number of loans sold between January and April in 2013 to the same period this year have dropped by 42 percent.

 

Since the introduction of these changes the costs of borrowing has fallen and lenders have been using “tighter” affordability checks, according to the study.

 

Research also found that of the 1,200 consumers surveyed those buying loans in 2015 were on average coming from higher-income brackets than in 2013.

 

Almost a third of all consumers surveyed said if they were not able to access a loan they would have to go without essentials like, food, petrol or heating.

 

Nigel Keohane, research director of the SMF, said: “Policy makers should be vigilant about the potential risks to those who are excluded from the market.

 

“Effective regulation of affordability checks will also continue to be important, as will ensuring that over time the cap does not dampen competition.”

 

Credit Strategy’s upcoming F5 conference will feature a stream focusing on compliance in alternative lending.

Share on Twitter Linkedin black
Add New Comment
YOU MIGHT ALSO LIKE

Social pressures to overspend

Parents are spending more money on their children than they can afford as a result of social pressure, according to a new report.

The Car Finance Awards are now open for nominations

The Car Finance Awards is back for its third year in 2018, taking place after the Car Finance Conference in Nottingham on June 7

‘No room for complacency’ as consumer credit hits £205bn

Consumer credit has grown nearly 10 percent in the year to October 2017 – with outstanding balances now at more than £205bn

Credit reference agencies unite to aid GDPR preparations

Callcredit, Equifax and Experian have launched a Credit Reference Agency Information Notice (CRAIN) to help lenders and consumers prepare for GDPR
LATEST IN ANALYSIS

The CS Interview

The patriot

The patriot

Features

Ahead of the curve: Five reasons why Intelligent Environments secured the Best Collections Technology Award
Share on Twitter Linkedin black

Ahead of the curve: Five reasons why Intelligent Environments secured the Best Collections Technology Award

Opinion

“Financial products shouldn’t trap people in debt”
Share on Twitter Linkedin black

“Financial products shouldn’t trap people in debt”

Bank NPL analysis

Banks continue purge of bad debt from balance sheets

Banks continue purge of bad debt from balance sheets

Upcoming events

Credit Week 2018


Parliamentary Reception


CDSP European NPL


C-Suite Dinners

Credit Strategy

Did you find our website useful?

Thank you for your input

Thank you for your feedback

creditstrategy.co.uk – an online news and information service for the UK’s commercial and consumer credit industry. creditstrategy.co.uk is published by Shard Financial Media Limited, registered in England & Wales as 5481132, Axe & Bottle Court, 70 Newcomen St, London, SE1 1YT. All rights reserved. Credit Strategy is committed to diversity in the workplace.
@ Copyright Shard Media Group