New consumer finance business grew by seven per cent year-on-year in March, figures from the Finance & Leasing Association (FLA) have shown.
FLA members reported £9.16bn in total consumer finance last month. However, in the first quarter new business dropped by 17 per cent year-on-year to reach £20.49bn.
The retail store and online credit sector reported growth in new business of 11 per cent in March compared with same month in 2020, and a two per cent increase in the first quarter of 2021.
The credit card and personal loan sectors together saw a two per cent fall in new business in March, compared with the same month in 2020, and a contraction of 25 per cent in the first three months of 2021.
“The consumer finance sectors represented by FLA members showed improvement across the board in March, with several reporting new business growth,” said Geraldine Kilkelly, director of research and chief economist at the FLA.
“A year on since the introduction of the first restrictions to deal with the pandemic, the market and wider economy continue to be impacted by ongoing restrictions. However, the latest set of figures show that the industry has adapted to meet the challenges posed by the crisis.
“FLA’s most recent research suggests that consumer finance providers are increasingly optimistic about the outlook for the rest of 2021.
“While mindful of the possibility of higher unemployment and a dip in confidence once the government support schemes come to an end, 84 per cent of respondents to our latest industry outlook survey expect new business growth over the next 12 months.”
FLA members also reported £88m in new second charge business in March, down five per cent year-on-year, and £211m in the first quarter, a drop of 30 per cent from the same quarter in 2020.
“In March, the second charge mortgage market reported its highest monthly new business volumes since the same month in 2020,” said Fiona Hoyle, director of consumer & mortgage finance and inclusion at the FLA.
“FLA members are increasingly optimistic about the outlook and we expect to see a strong rebound in demand over the next year.”