FLA sees lending "hit by the downturn"

27/05/2009

The amount creditors have lent in secured loans has nosedived over the past year, the Finance and Leasing Association (FLA) has revealed.

According to new year-on-year figures from the organisation, the market in the loans has dropped by 76 per cent.

Other unsecured loans were found to have declined by 37 per cent, in a signal that conservative consumers are less willing to borrow in the recession.

However, these falls were offset by evidence of increased activity elsewhere.

While credit cards suffered a decline of just three per cent, in-store credit was found to have defied the downturn and grown by 24 per cent in the past year.

Commenting on the research, Geraldine Kilkelly at the FLA, said: "Overall, consumer finance is still being hit by the downturn. With a depressed housing market many people are choosing to improve their homes and replace furnishings rather than move house.

"Retailers and lenders have been offering attractive interest-free credit and deferred payment deals on store instalment credit."

Overall lending levels from FLA members were found to have dropped by 13 per cent in the year to March 2009, compared with the previous 12 months.

A total of £58 billion of credit was extended over the period.

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