Pent-up consumer demand fuels consumer finance recovery

Despite the renewed lockdown because of the pandemic, the first four months of 2021 saw new business rise 1% on the same period last year.

The credit cards and personal loans sector saw the largest month-on-month growth, with new business up by 61% in April 2021 compared with April 2020. For the first quarter of 2021, however, the sector saw a 12% fall in new business.

Retail store and online credit reported a 31% increase in new business in April 2021 compared with the same month last year, and 8% growth for the first quarter of the year.

Geraldine Kilkelly, director of research and chief economist at the FLA, said: “The latest figures show that the recovery in April was broad-based, with new business provided through personal loans and credit cards growing, year-on-year, for the first time since the pandemic began.

“Pent-up demand and an improvement in consumer confidence are expected to contribute to a strong recovery during the second half of 2021, with our latest research suggesting that consumer finance new business will grow by 14% in 2021 as a whole, and by a further 16% in 2022.”