Direct loans market showing signs of recovery

The latest market figures from the Finance & Leasing Association (FLA) show that direct loans increased for the third consecutive month, with new business in January up 27% compared with January 2010.

Consumer credit lending in total rose by five percent in January, representing the first overall rise since August.

Along with growth in the personal loans market, there was also growth in credit cards and the car finance market, of 3% and 16% respectively compared with January 2010.

But High Street credit continued to fall as consumer confidence remains low, with store card spending shrinking by 18% and store instalment credit down by 11% compared with January 2010.

Fiona Hoyle, FLA Head of Consumer Finance, said: "In the last twelve months our members provided over £50 billion of consumer credit, but consumer confidence remains low. A sustained economic recovery is dependent on a competitive market that creates more choice for consumers. It is important that any changes to the regulatory regime for credit markets, under a new Financial Conduct Authority, do not impede this growth."