On 21 July 2015 the Consumer Finance Association (CFA) published a press release on its Credit 2.0 report, which contrasts the changing financial attitudes of borrowers in the growing economy with a 70% reduction in access to short-term credit following the introduction of new consumer credit regulations.
The report gives an insight into the current state of the short-term loans industry, based on analysis of consumer borrowing and trends since the new regulations came into force. The report shows:
- restricting access to short-term credit can result in exposure to more risk for low to middle income borrowers;
- debt is often driven by arrears on household bills such as utilities and council tax, while credit is being used for financial management purposes; and
- changes to the economy and consumer lifestyle is driving demand for short-term credit from a diverse range of borrowers.
Russell Hamblin-Boone, Chief Executive of the CFA commented “technology is changing the way we live and our ‘instant society’ demands quick decisions, simple products and convenient ways to borrow small sums for short periods of time. Critics of innovation that refuse to embrace the change by trying to hold back the tide could find themselves swept away by modern life”.