In Focus Collections
Time to take action on forbearance
‘Government needs to act now to support non-bank lenders as forbearance requests reach almost 1.2 million’
Stephen Haddrill Director general, Finance & Leasing Association
Last month, we renewed our call to the government and the Bank of England to take urgent action to support the non-bank lending market. Our figures showed that our members
provided just over £138bn of new business in the 12 months to March 2020. Of this total, £44bn was provided by non-bank lenders. The asset, consumer and motor finance
markets have been hit hard by the measures taken to deal with the coronavirus crisis, with a 20% fall in new business in March alone. Members have also faced almost 1.2
million Covid-19 related requests for forbearance, of which 75% have already been granted. The industry is committed
to supporting their customers during these exceptional times. Urgent action is needed – in days, not
weeks – to deliver financial support to the non-bank lending sector to ensure that we maintain a financial services sector that is diverse, innovative and competitive.
Car finance New figures show that new business volumes in the consumer car-finance market fell in March 2020 by 27% compared with the same month in 2019, and by 13% in first quarter of 2020 as a whole. The consumer new car finance market
Members have also faced almost 1.2 million Covid- 19 related requests for forbearance, of which 75% have already been granted. The industry is committed to supporting their customers during these exceptional times. Urgent action is needed – in days, not weeks – to deliver financial support to the non-bank lending sector to ensure that we maintain a financial services sector that is diverse, innovative and competitive
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reported new business volumes 29% lower in March 2020 compared with the same month in 2019. The percentage of private new car sales financed by our members reached a record-high of 95.6% in the 12 months to March 2020. The consumer used car finance market reported a fall in new business volumes of
24% in March 2020 compared with the same month in 2019. The motor-finance market has been hit
hard by the lockdown in March as the main route to customers through dealerships closed. Our latest research suggests that the consumer car finance market is likely to see the value of new business fall by 29% in 2020 as a whole. We urge the government and Bank of
England to open up financial support schemes to all lenders, including non-banks, so that they can meet the significant current demand for forbearance and provide new lending when the economy re-opens. This will also ensure that the motor finance market remains diverse, innovative and competitive after the crisis.
Asset finance Total asset finance new business (primarily leasing and hire purchase) fell by 28% in March 2020 compared with the same
Total FLA new business
www.CCRMagazine.com
September 2020
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