Published: September 2015
Pages: 36
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About this report

NB this is an old report which we have not updated in the last couple of years. Let us know if you would be interested in a new version.

In this report we review the UK Home Credit, or doorstep lending industry.

We quantify the market size, 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 and supplier trends – setting out historical changes and available forecasts.

What are the objectives of this market report?

Home Credit remains a major industry providing finance to large numbers of people throughout the country.

The industry is frequently in the news but is not always well-understood.

Lenders are often criticised for charging high rates of interest which exploit low-income consumers

They are also frequently praised for offering credit to those who cannot obtain it from mainstream sources and giving them an alternative to illegal loan sharks

This report aims to probe beneath these two statements, explore the factors which drove historical growth of the market and provide a view on how likely it is to continue in the future

We believe that, in order for those involved in the market to make the best decisions in this complex and changing environment, they need to have access to the best information. The aim of this report is to provide this

It is intended for:
– Operators of Home Credit businesses themselves
– Investors in these businesses
– Market regulators and policymakers
– Banks, analysts, consultants and other parties with interests in the sector

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 Home Credit 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.


Home Credit market overview - 8
- Description
- Adjacent markets and alternatives to home credit
- Customer needs
- Borrowing costs
- Value drivers for Home Credit providers
- Market characteristics

Market size and growth - 14
- Market size and growth
- Discussion of key drivers
- Macroeconomic trends
- Regulation

Competitive landscape - 23
- Leading companies
- Profitability
- Revenue per employee

Home Credit providers profiles - 26
- Provident
- Loansathome4U
- Morses Club
- Mutual

Forecasts - 31
- Unemployment
- Wages
- Market forecast
- Risks to the forecast

Appendix - 36

List of figures (UK Home Credit Market Report)

1. Main reason for taking out Home Credit loan / %
2. How consumers used their most recent loans / % Reasons for taking out agreement
3. Five most common reasons for taking out a loan
4. High cost credit types APR / %
5. Total amounts repaid (including principal) for £100 loan / £
6. UK Home Credit market size / £m
7. UK real GDP / % annual changes
8. Historical number of unemployed and underemployed / m
9. Number of people in employment / m
10. UK average wages and real household disposable income annual growth rates / % annual change
11. UK student loan total outstanding balance /£bn
12. Historical UK number of bank branches / ‘000
13. European countries’ number of bank branches per million people in 2011
14. European countries’ bank branches CAGR (1999-2011) / %
15. Number of adults without a bank account/cannot access credit
16. UK outstanding consumer credit / £m
17. Number of credit cards in issue / m, end of year
18. Leading UK Home Credit lenders market share by latest revenues / £m
19. Revenue growth rates of Home Credit providers in the latest year
20. Latest pre-tax profit margins of Home Credit operators / %
21. Revenue per employee / £‘000
22. Provident Financial Plc. summary financials
23. S&U Plc. summary financials
24. Morses Club Limited summary financials
25. Mutual Clothing & Supply Company Limited summary financials
26. UK real GDP / annual changes
27. Unemployment and underemployment / m
28. Number of people in employment / m
29. UK average earnings / % annual change (nominal)
30. Home Credit - forecast market size / £m

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