Sector Focus 

Sub-prime credit: headed for a fall?

Sub-prime credit: headed for a fall?

The UK’s major sub-prime instalment loan providers seem to be sitting in a sweet spot. The Financial Conduct Authority’s (FCA) price cap reduction in 2015 put the brakes on the rapidly expanding payday lending market, forcing those lenders out of business or – without the additional fees and interest from rolling over debt – trading at reduced margins. Meanwhile, the addressable market for non-standard credit, from those with poor credit ratings or a lack of credit history, is estimated to be between 10m and 12m adults in the UK.

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