Published: March 2023
Pages: 89
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UK Non-Prime Consumer Credit Market Insight Report 2023

Includes sub-prime and near-prime credit

About the report

Our review of the non-prime, or high-interest, consumer credit market describes the market for consumer credit agreements with average fixed interest rates over 30% per year, and profiles the main lenders involved in it. It includes:

    – Review of each of the segments in the market (see below)

    – Discussion of key segment issues including the impact of regulation, and sets out our estimates of historical and forecast growth for each.
    – A set of 35 lender profiles of those active in the sector, covering financial performance, ownership, loan products offered, market positioning, corporate activity and history of the lender.

We cover the following segments and lenders operating within them:

    – Guarantor finance (key providers include Amigo Loans (to close), Non-Standard Finance’s Trust Two and George Banco brands (both in run-off) and Guarantormyloan.co.uk
    – High cost short term credit (following the exit of the majority of the largest firms, key providers include Gain Credit and PDL Finance)
    – Home-collected credit (following Provident’s decision to leave the market, key providers include Morses Club and Non-Standard Finance (in run-off))
    – Instalment credit (key providers include Non-Standard Finance’s Everyday Loans, Madison CF’s 118118 loans, Oakbrook Finance, Bamboo and Oplo)
    – Motor finance (key providers include S&U plc’s Advantage, Provident’s Moneybarn, First Response and Startline)
    – Sub-prime credit card and other revolving loans (key providers include CapitalOne, NewDay and Provident’s Vanquis)
    – Pawnbroking (key providers include H&T Group and Ramsdens Financial)
    – Logbook loans (key providers include CarCashPoint)
    – Rent-to-own (key providers include Mutual Clothing and Supply )

Many of the leading providers and their investors are now involved in more than one segment

We estimate total loan receivables across the market to have been just over £10bn at the end of 2021, up around 6% from 2020, but still slightly below 2019 levels.

  • Average loan durations vary by segment from under 3 months to 30 months.
  • Loan impairment levels vary by segment from 10% to 35% of gross loans.
  • Average interest rates vary by segment from 30% fixed to 260% fixed


Key market events include:

  • The closure of most leading firms in the guarantor loans, home credit, HCSTC and Rent-to-own segments over the last five years, culminating in the announced closure of Amigo Loans in March 2023.
  • Regulation: Despite there being clear potential for these segments to offer real value for consumers, we believe that there is now significant doubt regarding the feasibility of new lenders being launched with confidence of meeting all relevant regulation.
  • Ongoing tightening of underwriting rules by mainstream lenders, leading to ongoing demand for the remaining core products in the non-prime sector, including instalment loans, motor finance and credit cards.

The macroeconomic picture supports ongoing demand for non-prime credit:

  • The Office of Budget Responsibility expects 2022-23 to see the biggest fall in real household disposable income – which it regards as a good proxy for standard of living – since records began over 50 years ago.
  • Forecasts are for unemployment to remain at similar levels with significant under-employment (those in work who want to work more hours than they currently do).
  • After a significant increase this year, real wages are expected to be flat for the next two years followed by much more modest increases.
    However the market is largely constrained by supply.

  • Market growth primarily depends on the decisions of current lenders, potential new entrants and their respective investors regarding their willingness to set up / expand operations and enter new areas.
  • Financial Conduct Authority regulation of consumer credit, together with Financial Ombudsman judgements based on compliance with FCA rules, remains a key constraint.
    Our market forecast scenario envisages instalment loans and motor finance to account for most of the overall growth in the non-prime market with some recovery in other segments including guarantor and rent-to-own.

  • Our expectations for individual segments are set out within the report.
  • There is significant potential for faster market growth should existing or future lenders decide to make larger investments than we envisage.

    Other factors which have influenced the growth of the market, and which are analysed in the report, include:

      1. Overall economic performance influences the appetite of consumers for borrowing and also their ability to repay loans they take out
      2. Demand for non-prime credit is likely to follow a similar trend to that of overall consumer borrowing with many non-prime borrowers seeking to borrow for reasons similar to those of mainstream borrowers and availability of finance for both being subject to similar influences.
      3. Levels of unemployment and underemployment affect the number of people who are in a position to obtain both non-prime and mainstream credit. Also, increases in unemployment are a major cause of repayment problems
      4. Trends in earnings from wages and benefits show that, while wages have grown in recent years, the government’s austerity agenda has led to significant working-age benefit cuts and that debt levels are high relative to earnings
      5. Other workforce trends such as self-employment – which has grown – and trade union membership – which has steadily fallen – show an increase in the precariousness of the labour force and a weakening of the ability of organised labour to increase wages
      6. Trends in housing costs and affordability show that levels are high and have continued to increase relative to earnings
      7. Reduction in the number of bank branches and credit cards in circulation give some indication of reduced access to mainstream finance. Another comes from ‘thin’ credit files – where potentially creditworthy borrowers lack a credit history on which to base lending decisions
      8. Personal insolvency levels remain high by historical standards with numbers of formal solutions being once more on the increase
      9. Rises in other measures of poverty such as food bank usage and rough sleeping levels confirm that the numbers in extreme poverty – who are likely to struggle to repay loans – are increasing
      10. Motor industry and car finance trends – for the non-prime motor finance segment


    Who is the report intended for?

    Operators of of non-prime 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?

    Interviews with senior-level contacts in the consumer credit industry
    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 flex them where required to model alternative scenarios.


    Who was the report written by?

    Frank Proud

    • Frank founded Apex Insight in 2012 and set up our Consumer Credit practice
    • His background is strategy consulting, with two firms, Bridgewater and Burlington, which were originally founded by ex-Bain teams.
    • Subsequently, he was a senior member of the Transaction Support team at EY, advising private equity firms and corporate acquirers on commercial due diligence and other acquisition-related issues.
    • He leads Apex Insight’s consulting work for investors and clients in the industry
    • He has an MA in Economics from Cambridge University.

    Julian Rose

    • Julian is a specialist in the regulation of asset finance markets including business leasing and consumer credit.
    • From 2008 to 2014 Julian was Head of Asset Finance at the Finance & Leasing Association.
    • His previous experience spans regulation with the Financial Reporting Council and Competition Commission (now the Competition and Markets Authority), management consulting with PwC and KPMG, and industry with NCR and UPS.
    • He is a Chartered Management Accountant and has Masters Degrees in Management from Boston University and Competition and Regulation from the University of East Anglia

    Introduction    1

    Market background       5

    Market size and growth  5

    Outlook for the market   6

    About Apex Insight        7

    Company background   7

    Consulting services       7

    Commercial / operational due diligence  7

    Custom market analysis 7

    Primary research           7

    Growth strategy 7

    Related research           7

    About Apex Insight: example consumer credit / financial research and consulting clients   8

    Contents           9

    List of charts and tables 14

    Non-prime consumer credit market         16

    Definition          16

    Number of non-prime consumers           17

    Non-prime consumer credit market segments     18

    Market size by Revenue 18

    Market size by book size           19

    Market size by new lending        19

    Source: Apex Insight analysis Market growth      19

    Non-prime consumer credit segments    21

    1. Guarantor Finance     21

    Definition          21

    Key players       21

    Sector size        21

    Sector trends    21

    2. High Cost Short Term Credit (HCSTC)             22

    Definition          22

    Key players       22

    Sector size and trends   22

    Insight: Price cap makes traditional payday loans unprofitable     22

    3. Home-collected Credit            24

    Definition          24

    Key players       24

    Sector size        24

    Sector trends    24

    Source:  Apex Insight analysis    24

    4. Instalment Credit       25

    Definition          25

    Key players       25

    Sector size        25

    Sector trends    25

    5. Motor finance 26

    Definition          26

    Significant players         26

    Sector size and trends   26

    Sector trends    26

    6. Credit cards and other revolving Loans           27

    Definition          27

    Key players       27

    Sector size        27

    Sector trends    27

    7. Pawnbroking 28

    Definition          28

    Significant players         28

    Sector size        28

    Sector trends    28

    8. Logbook loans          29

    Definition          29

    Significant players         29

    Sector size        29

    Sector trends    29

    9. Rent-to-own   30

    Definition          30

    Significant players         30

    Sector size        30

    Sector trends    30

    Insight: Non-prime finance departs from the high street    31

    Alternatives       32

    Credit unions     32

    Community Development Finance Institutions     32

    Fintech solutions           32

    Government alternatives            32

    Unauthorised lenders     33

    Effect of the COVID-19 pandemic           34

    Drivers of Non-Prime Credit Usage         35

    1. Economic growth       36

    3. Unemployment and underemployment            37

    4. Wage growth and the impact of benefit policies           39

    5. Levels of self-employment and trade union membership          40

    6. Housing costs           42

    7. Access to mainstream finance            43

    8. Personal insolvency and bankruptcy   44

    9. Other poverty indicators: food bank usage and rough sleeping 45

    10. Motor industry and car finance trends            46

    Used car sales volume forecasts           46

    New car sales volume    46

    Our forecast scenario for used car sales volumes            46

    Motor finance penetration          47

    Regulatory impacts       47

    Other drivers of finance penetration        48

    Used car finance penetration levels        48

    Forecast used car finance values           49

    Non-Prime Credit Regulation      51

    FCA regulation  51

    Affordability and other regulation is key to the market      52

    Outlook for the market and our forecast scenario 54

    Guarantor finance         56

    High Cost Short Term Credit (HCSTC)    56

    Home-collected credit    56

    Instalment credit            56

    Motor finance    56

    Sub-prime credit card and other revolving loans  56

    Pawnbroking     56

    Logbook loans  57

    Rent-to-own      57

    Major lenders (loan books >£30m)         58

    Advantage Finance        58

    Ownership         58

    Corporate activity          58

    Products           58

    Recent information        58

    Amigo Loans     59

    Ownership         59

    Corporate activity          59

    Products           59

    Recent information        59

    Bamboo           60

    Ownership         60

    Corporate activity          60

    Products           60

    Billing Finance   61

    Ownership         61

    Corporate activity          61

    Products           61

    Other information          61

    Capital One       62

    Ownership         62

    Other information          62

    Evolution Money Group 63

    Ownership         63

    Corporate activity          63

    Products           63

    Other information          63

    First Response  64

    Ownership         64

    Corporate activity          64

    Products           64

    Other information          64

    Gain Credit       65

    Ownership         65

    Products           65

    Other information          65

    Go Car Credit    66

    Ownership         66

    Corporate activity          66

    Products           66

    H & T Group PLC (Harvey & Thompson) 67

    Ownership         67

    Corporate activity          67

    Products           67

    Other information          67

    Indigo Michael (Safety Net Credit) (In administration)       68

    Ownership         68

    Corporate activity          68

    Products           68

    Madison CF UK (118 118 Money)           69

    Ownership         69

    Corporate activity          69

    Morses Club      70

    Ownership         70

    Corporate activity          70

    Products           70

    Other information          70

    Mutual  71

    Ownership         71

    Corporate activity          71

    Products           71

    Other information          71

    NewDay            72

    Ownership         72

    Corporate activity          72

    Products           72

    Other information          72

    Ownership         73

    Corporate activity          73

    Products           73

    Other information          73

    Norfolk Capital  74

    Ownership         74

    Corporate activity          74

    Products           74

    Other information          74

    Oakbrook Finance         75

    Ownership         75

    Corporate activity          75

    Products           75

    Perfect Home (previously Temple Finance) (In administration)     76

    Ownership         76

    Corporate activity          76

    Products           76

    Other information          76

    Provident (Vanquis Banking Group)        77

    Ownership         77

    Corporate activity          77

    Products           77

    Other information          77

    Specialist Motor Finance            78

    Ownership         78

    Corporate activity          78

    Products           78

    Other information          78

    Tandem (Oplo 1st Stop) 79

    Ownership         79

    Corporate activity          79

    Other lenders (loan books up to £30m)   80

    1 Plus 1            80

    Avant Credit      80

    BETR Technology (Koyo loans) 81

    Chetwood Financial       81

    Greenlight Credit           82

    Mallard Leasing 82

    Marsh   83

    Match the Cash Limited 83

    Money in Minutes          84

    PDL Finance     84

    Premium Plan   85

    Ramsdens Financial      85

    SBTP Group     86

    Western Circle   87

    Appendix: abbreviations 88



    List of charts and tables

    Non-prime net receivables by sector 2021 (£ million)       5

    Revenue by non-prime segment 2021 (£m)         19

    Net receivables by non-prime segment 2021 (£m)           20

    New lending by non-prime segment 2021 (£m)    20

    Non-prime receivables trend by sector 2018-2021            21

    Non-prime receivables growth (2018-2021 CAGR %)      21

    Guarantor Finance sector key data for year to December 2021 (estimates)           22

    HCSTC new lending value (£ billion)       23

    HCSTC Finance sector key data December 2021 (estimates)       23

    Summary of profitability of HCSTC loans 24

    Home collected credit sector key data December 2021 (estimates) £m     25

    Instalment credit sector key data December 2021 (estimates)      26

    Motor finance sector key data December 2021 (estimates)           27

    Credit cards and other revolving loans sector key data December 2021 (estimates)           28

    Pawnbroking key data December 2021 (estimates)          29

    Logbook loans key data December 2021 (estimates)       30

    Rent-to-own key data December 2021 (estimates)           31

    Number of high street stores offering non-prime consumer credit 32

    UK real GDP / % annual changes           37

    UK self-employed workers / ‘000 41

    UK Trade union membership as % of those in employment          42

    Ratio of median house price to median gross annual residence-based earnings (England and Wales)        43

    Number of UK bank branches    44

    Number of credit cards in issue / m, end of year  44

    Food bank usage/ ‘000 parcels distributed by Trussell Trust         46

    Rough sleeping – England         47

    Historical and forecast car sales – volume / m     48

    Historical and forecast used car finance penetration by volume / %          49

    Historical and forecast used vehicle finance - volume ‘000           50

    Historical and forecast used vehicle finance value - £ billion         50

    Historical and forecast used car finance penetration by value / % 51

    Key FCA regulatory requirements relevant to Non-Prime Consumer Credit           52

    Historical and forecast new non-prime lending by segment: sub-prime credit cards vs other types / £m       56

    Historical and forecast new lending by segment excluding sub-prime credit cards/ £m       56

    Advantage Finance Limited Financials    59

    Advantage Finance Limited Receivables 59

    Amigo Loans Limited Summary Financials          60

    Amigo Management Services Ltd Receivables    60

    Bamboo Limited Summary Financials     61

    Bamboo Limited Loan Receivables         61

    Billing Finance Limited Summary Financials        62

    Billing Finance Loan Receivables           62

    Capital One (Europe) PLC Summary Financials  63

    Capital One (Europe) PLC Loan Receivables      63

    Evolution Money Group Summary Financials      64

    Evolution Money Group Loan Receivables          64

    First Response Finance Limited Summary Financials      65

    Gain Credit LLC Summary Financials     66

    Gain Credit LLC Loan Receivables         66

    Go Car Credit Limited Summary Financials         67

    Go Car Credit Limited Loan Receivables 67

    H&T Group Summary Financials 68

    H&T Group PLC Loan Receivables         68

    Indigo Michael Limited Summary Financials        69

    Indigo Michael Limited Loan Receivables            69

    Madison CF UK Limited Summary Financials      70

    Madison CF UK Limited Loan Receivables          70

    Morses Club plc Summary Financials     71

    Morses Club plc Loan Receivables         71

    Mutual Clothing and Supply Company Limited Loan Receivables £m        72

    NewDay Group Limited UK Summary Financials 73

    NewDay Group UK Limited Loan Receivables £m           73

    Non-Standard Finance plc Summary Financials   74

    Non-Standard Finance Loan Receivables           74

    UK Credit Ltd, Automoney Ltd, Mobile Money Limited Summary Financials           75

    UK Credit Ltd, Automoney Ltd, Mobile Money Limited Limited Loan Receivables   75

    Oakbrook Finance Limited Summary Financials  76

    Oakbrook Finance Loan Receivables      76

    Temple Finance Limited Loan Receivables £m    77

    Provident Financial Group PLC Summary Financials       78

    Provident Financial Group PLC Loan Receivables £m     78

    Specialist Motor Finance Limited Summary Financials     79

    Specialist Motor Finance Loan Receivables        79

    Oplo CF and Oplo PF Financials 80

    1st Stop Receivables (excluding home loans)      80



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