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Viewing report
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Non-standard Lending 2010: New Opportunities for Alternative Lenders
Datamonitor, Oct 2010, Pages: 250
Introduction
Non-standard lending comprises home credit and payday advances, as well as second charge loans and credit cards aimed at those excluded from mainstream credit. Many of these providers have found conditions demanding as arrears and defaults rise, while other lenders have successfully expanded their activities. The next few years promise to be equally challenging for the sector.
Features and benefits
- Defines and measures the non-standard population and projects its future growth.
- Analyses the recent performance of home credit and payday advance providers, as well as assessing the credit card and secured loans markets.
- Provides five-year forecasts for growth in lending across the various non-standard lines of credit.
Highlights
- The non-standard population is growing in size, as shifts towards self-employment, growing unemployment and increasing arrears combine to exclude ever more borrowers from mainstream credit.
- Home credit lending has seen only modest growth over the last few years, with outstanding balances rising by only 5% a year on average during 2005-9. The market was affected by crises at two of the four biggest lenders, as well as greater risk-aversion on the part of other providers. Future growth in lending will be low in what is a mature market.
- There has been an extremely rapid increase in payday advances over the last five years, with gross lending rising by a factor of four between 2005 and 2009. Further strong growth is expected in coming years, as growing variability in pay leads to increased demand for short-term finance to smooth out these fluctuations.
Your key questions answered
- Make informed market entry decisions by understanding the future size of the non-standard sector across each line of credit.
- Increase revenue by assessing which credit lines offer the greatest opportunity for growth.
- Identify the factors that have contributed to the success of some the largest non-standard lenders.
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