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Viewing report
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UK Consumer Credit 2011: Competitive Dynamics in the UK Unsecured Personal Loan Market
Datamonitor, Aug 2011, Pages: 31
Competition in the market remained largely flat in 2010 as major lenders focused their attention on selling to existing customers. There were minor competitive developments but the overriding focus of lenders was ensuring that bad debt levels remained under control. A dual market has begun to develop, with retail banks seeking to increase profitability and smaller lenders targeting market share.
Features and benefits
- Provides market share data for gross advances and balances outstanding for the largest UK personal loan providers.
- Analyzes developments in the channels used to arrange a loan and considers different lender profiles in terms of borrower loan size and term.
- Includes data on advertising expenditure to understand how much providers are willing to spend to promote their products and via which channels.
Highlights
- While the level of competition in the unsecured personal loans market has been subdued over the past three years there are signs of increasing competition. A dual market is developing, as retail banks aim to cross sell unsecured personal loans to high quality existing customers and smaller lenders are aiming to grow market share.
- Under an uncertain economic outlook, major lenders have continued to focus on their core business. There is a need to find business where they can write a good margin yet avoid taking on potential bad debt. Data indicate that demand is increasing among consumers, while on the supply side there has been a reported loosening of credit conditions.
- The overall level of advertising expenditure on unsecured personal loans increased 12.9% in 2010. While advertising expenditure among the major lenders decreased there was an increase in advertising expenditure by smaller lenders, especially pay day lenders such as Wonga and quickquid.co.uk.
Your key questions answered
- What is the current market size and structure?
- Who is aggressively targeting market share?
- What have been the chief issues affecting the market over the last 12 months?
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