Calls For Government To Review Loans Market Quickly
In his pre budget speech recently, the Chancellor of the Exchequer, Alistair Darling, said that the government intended to conduct a review of the non bank lending and personal loan markets, in order to help to get companies offering personal loans once again.
The Finance and Leasing Association (FLA) has now called on the Government to take action as quickly as it possibly can, in order to support the loan industry and those FLA members who have seen a severe decline in their business following the credit crunch and banking crisis.
The FLA have said that many of their members have seen a significant drop in the number of loans being offered to borrowers and that the overall amount of lending on new loans had fallen by 12 per cent in October this year, compared with the same period twelve months ago. Different areas of the lending market have been affected to differing degrees.
For example, store credit saw a decline of just 4 per cent, whereas the secured loan market saw a drop in new loan applications of 49 per cent compared with the same time last year, largely due to reduced property values and tighter lending criteria on loan to value ratios.
Fiona Hoyle of the FLA said “Our figures show that consumer credit providers continue to face a tough market. The biggest challenges for lenders in 2010 will be accessing affordable, wholesale funds to meet the consumer demand for credit. The Government must move quickly to follow up its pre budget report proposal to review non bank lending markets. Otherwise we may see further shrinkage in the market, which will mean less competition leaving consumers with less choice.”
