High-cost Credit: Uk Market Profile And Forecasts

High-cost credit has grown at rapid rates over the last few years with payday loans and pawnbroking being particularly dynamic segments.

Lenders are often criticised for charging high rates of interest to low-income consumers. They are also frequently praised for offering credit to those who cannot obtain it from other sources and giving them an alternative to illegal loan sharks.

This report aims to probe beneath these two viewpoints, explore the factors which have driven the high rates of growth and provide a view on how likely it is to continue in the future.

This market report combines all the findings and analysis from the four separate reports we have produced which review each of the main markets which go to make up the UK high-cost credit industry. These are:

• Online payday loans
• Pawnbrokers & money shops
• Home credit
• Rent-to-buy retail.

This report is therefore designed for clients with an interest in all of these markets.

We quantify the market sizes, historical growth rates, segmentation patterns and levels of industry profitability while reviewing key factors behind these figures. We also carry out an in-depth analysis of the relevant drivers of industry growth – in particular the macroeconomic environment, trends in lending, the regulatory environment and other specific factors influencing this market such as the gold price – setting out historical trends and available forecasts.

Our forecast for industry growth by segment is based on this analysis of historical trends and growth drivers.

Who is it intended for?

Pawnbrokers
Payday loan companies
Home credit companies
Rent-to-buy retailers
Investors in those sectors
Banks
Consultants
Government and regulatory bodies

What are the sources and methodology?

This report is based on:

• Interviews with senior-level contacts across the high-cost credit market
• Extensive research into published industry sources
• In-depth analysis of the macroeconomic environment and relevant market drivers
• Financial analysis of the accounts of companies in the industry.

Information from these sources has been synthesised and presented clearly and concisely with extensive use of charts and tables to illuminate points and support conclusions.

Market forecasts have been constructed using simple assumptions which are clearly stated. Supporting evidence is provided for our assumptions but readers can easily flex them to model alternative scenarios."