Consumer demand for loans and credit falls
August 26, 2010
It has been claimed in a recent report that consumer demand for loans and credit has fallen in the last twelve months, with officials claiming that the lower demand for credit amongst consumers is a sign of the continued economic uncertainty and low confidence levels amongst consumers.
The report was released by the Finance & Leasing Association, which claims that the take up of finance has fallen because consumers still have little confidence in the economy despite the recession being over and signs of recovery of various markets. Many are still said to be concerned over job security, which is also knocking confidence levels.
The FLA has released data showing that in the twelve months leading to June of this year consumers used around 8 percent less credit than in the previous twelve months. However, whilst the take up of credit was lower in the last twelve months than the previous twelve months many people are still said to be using loans, credit cards, overdrafts, and other forms of finance.
In the second quarter of the year FLA members are said to have lent consumers £12.5 billion, and consumers have used the money for a range of purposes, such as buying vehicles, paying for holidays, and even for every day entertainment and eating out.
Fiona Hoyle from the FLA said: “This month’s figures suggest that consumers are uncertain about the economy. It may be that they are waiting to see the impact of public sector expenditure cuts on disposable income before making any long-term repayment commitments on credit. The statistics show that the credit market is still weakened. Last month, the Government announced a review of consumer credit and personal insolvency to take place in the autumn.”
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