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High-cost credit: UK market profile and forecasts

  • ID: 2309221
  • Report
  • November 2012
  • Region: United Kingdom, Great Britain
  • 95 Pages
  • Apex Insight
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  • BrightHouse
  • Cheque Centres
  • H & T Group Plc.
  • MEM Consumer Finance
  • Payday Express
  • Provident Financial Plc
  • MORE
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 produced by Apex Insight 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.

The 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.
Note: Product cover images may vary from those shown
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3 of 5


  • BrightHouse
  • Cheque Centres
  • H & T Group Plc.
  • MEM Consumer Finance
  • Payday Express
  • Provident Financial Plc
  • MORE
The high-cost credit market
Market definition
Forms of lending
Borrowing costs
Market size
Alternatives to high-cost credit

Market drivers
Discussion of market drivers
Drivers and their impact

Online payday loans
Market size and growth
Market characteristics and trends
Competitive landscape
US market comparison

Pawnbroking and money shops
Market size and growth
Competitive landscape

Home credit
Market size and growth
Competitive landscape
Market characteristics and trends

Market size and growth
Market characteristics and trends

Real GDP and inflation
Household disposable income
Gold price
Market forecast
Risks to the forecast

Credit provider profiles

List of Figures:

1.High cost credit types APR / %
2.Total amounts paid including principal / £
3.Reasons for taking out agreement / %
4.Total high-cost credit market size / £m
5.2011 pre-tax margins for the high-cost credit markets / %
6.2011 revenue per employee for the high-cost credit markets / £m
7.UK GDP in current prices (money GDP), inflation (GDP deflator) and real GDP / % annual changes
8.Historical number of unemployed and part time employed / (‘000)
9.Historical number of new debt solutions per year / ('000)
10.UK student loan total outstanding balance / £bn
11.UK real median income and gross household disposable income annual growth rates / % annual change
12.Historical UK number of bank branches
13.European countries number of bank branches per million people
14.European countries bank branches CAGR (1999-2010) / %
15.UK outstanding consumer credit / £m
16.Loan-to-deposit ratios at major UK banks / %
17.Number of credit cards in issue / m, end of year
18.Percentage of gross lending not repaid / %, year average
19.Historical gold price / £ per ounce
20.UK and Ireland gold scrappage and consumption / tonnes
21.Online payday lending market size / £
22.Wonga number of loans / m
23.UK online payday lenders' revenue, market shares / £m, %
24.Revenue growth rates of leading online payday lenders / CAGR %
25.Latest number of employees for online payday lender
26.Latest revenue per employee for online payday lenders / £'000
27.Latest pre-tax profit margins of online payday lenders / %
28.UK vs US payday loan company revenue per £ lent (2010)
29.Number of loans / m
30.Forecast UK online payday loan market size / £m
31.Reason for using particular pawnbroker / %
32.Historical segmentation of pawnbrokers gross profit / %
33.Historical UK pawnbroking market size / £m
34.Historical numbers of pawnbroker and money shop stores
35.Pawnbrokers' franchised store numbers, franchised stores as % of total stores
36.Revenue per store / £m
37.H & T average pawn loan / £
38.2012 UK US pawn stores per million adults (18+)
39.2011 US UK revenue per adult (18+) / £
40.Leading UK pawnbrokers market share / £m
41.Revenue growth rates of leading pawnbrokers – CAGR %
42.Leading pawnbrokers' 2011 revenue per store / £m
43.Latest pre-tax profit margins of pawnbroking chains / %
44.Pawnbroking number of stores
45.Pawnbroking – Forecast market size / £m
46.Main reason for taking out home credit loan / %
47.UK home credit market size / £m
48.Leading UK home credit providers market share / £m
49.Forecast UK home credit market size / £m
50.Historical UK rent-to-buy market size / £m
51.Leading UK rent-to-buy providers market share / £m
52.Revenue growth rates of leading rent-to-buy providers – CAGR %
53.Rent-to-buy – Historical no. of stores by year
54.Latest pre-tax profit margins of leading rent-to-buy providers / %
55.Latest revenue per employee for rent-to-buy providers / £'000
56.2010 UK US stores per million adults (18+)
57.2010 UK and US rent-to-buy revenue per adult (18+)
58.Rent-to-buy – Forecast no. of stores by year
59.Forecast UK rent-to-buy market size / £m
60.UK nominal GDP, inflation (GDP deflator) and real GDP / % annual changes
61.Forecast number of unemployed and historical part time employed / (‘000)
62.UK real household disposable and median income / % annual change
63.Gold price forecast / £/oz
64.UK high-cost credit market revenue / % annual change
65.Wonga.Com Ltd. summary financials
66.Cash America International Inc. summary financials
67.Wage Day Advance Ltd. summary financials
68.DFC Global Corp. summary financials
69.Instant Cash Loans Ltd trading as The Money Shop summary financials
70.MEM Consumer Finance summary financials
71.Cash Generator summary financials
72.Cheque Centres summary financials
73.Albermarle & Bond Jewellers & Pawnbrokers Ltd. summary financials
74.H & T Group Plc. summary financials
75.Cash converters (UK) holdings Plc. summary financials
76.Provident Financial Plc. summary financials
77.S & U Plc. summary financials
78.BrightHouse Ltd. summary financials
79.Buy As You View Holdings Ltd. summary financials
80.Perfect Home Holdings Ltd. summary financials
Note: Product cover images may vary from those shown
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- Albermarle & Bond Jewellers & Pawnbrokers
- BrightHouse
- Buy As You View Holdings
- Cash America International Inc.
- Cash Generator
- Cash converters (UK) holdings Plc.
- Cheque Centres
- DFC Global Corp.
- Greenwood Personal Credit
- H & T Group Plc.
- Homebuy / Cobco 834
- Instant Cash Loans trading as The Money Shop
- Loansathome4U
- MEM Consumer Finance
- Morses Club
- Mutual Clothing & Supply
- Payday Express
- PaydayUK
- Perfect Home Holdings
- Provident Financial Plc
- QuickQuid
- S & U Plc
- Shopacheck
- The Money Shop
- Wage Day Advance
- Welcome Financial
- Wonga.Com
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown