英国の住宅訪問クレジット市場

Abstract

Overview

Introduction

Providers have struggled in recent years as the UK home collected credit market stagnated. However, the tide appears to have changed following a couple of years of growth. Yet this is still a mature market, with several ongoing challenges that participants need to address in order to ensure continued success.

Scope

• Sizes the UK home collected credit market and presents scenario-based five year forecasts.
• Provides market share data for the major competitors in the home collected credit market.
• Gives insight into the future challenges of the market and how lenders could respond.

Report Highlights

The home collected credit market' s future growth remains inhibited by its highly mature nature. There is still good reason for providers to look to diversify into other product areas or grow the business through geographical expansion, though lenders focused on the sector will be able to experience higher lending volumes than in previous years.

Economic conditions have become tougher for home credit customers, as household bills have increased in recent years. Such higher household expenses are taking up a greater proportion of home credit customers' salaries and are therefore pushing more of them towards home collected credit, more often than not to fill the gap until the next payday.

Though the market has reached a stage of maturity, consolidation nevertheless continues, creating opportunities for a number of larger lenders. So far, Cattles and S&U are particularly taking advantage of the occurring consolidation.

Reasons to Purchase

• Understand how the market is changing and where the new opportunities lie.
• Gives you a competitive edge by providing you with a thorough analysis of the UK home collected credit market.
• Draw on Datamonitor' s five-year scenario-based forecasts to plan your future strategy with confidence.

Table of Contents

• Overview
  • Catalyst
  • Summary
• Executive Summary
  • The UK home collected credit market became somewhat more attractive again in 2006
    • Home collected credit provides short-term, unsecured cash loans typically in the region of £200 to £400
    • Things are looking up for home collected credit, but growth remains sluggish
      • Balances outstanding increased by 5.3 per cent in 2006 after a number of years of weak growth
    • Its prospects have improved modestly, but the market' s future outlook still reflects its mature nature
      • Under the Datamonitor View scenario, the market will grow at a slow pace over the next five years
  • The competitive dynamics of the UK home collected credit sector create further challenging conditions
    • The market continues to be dominated by the ' big four'
      • Provident leads the market with a significant 60.5 per cent share in terms of balances outstanding
    • Meanwhile, a number of other strategic changes are taking place
  • Lenders need to stay ahead of challenges to benefit from what limited growth the market has to offer
    • Home credit providers will continue to face a number of challenges
• Table of Contents
• Table of figures
• Table of tables
• The UK home collected credit market became somewhat more attractive again in 2006
  • Home collected credit fills an important niche for small amounts of unsecured credit
    • Home collected credit provides short-term, unsecured cash loans typically in the region of £200 to £400
    • Home collected credit customers are part of a broader set of non-standard individuals
      • An element of subjectivity is needed with any definition of non-standard
      • Datamonitor estimates that there were 7.0 million non-standard individuals in 2006
    • The home credit market is a sub-sector of the non-standard unsecured personal loans market
  • Things are looking up for home collected credit, but growth remains sluggish
    • Datamonitor' s methodology for sizing the home collected credit market is based on two measures
      • Lenders implemented new accounting standards in 2005-6, which has caused market figures to change
    • Balances outstanding increased by 5.3 per cent in 2006 after a number of years of weak growth
  • Challenging economic conditions helped to push the market forwards in 2006
    • Higher household bills made life more difficult for home credit consumers
    • Mainstream lenders tightened their lending criteria
    • But the UK home collected credit market remains mature
      • The home collected credit market has contracted over the last five years, in contrast to other credit markets
  • Its prospects have improved modestly, but the market' s future outlook still reflects its mature nature
    • Datamonitor' s forecasts consist of three different scenarios of the UK economy
      • Datamonitor' s forecasting model calculates home credit' s penetration of the non-standard population
      • Datamonitor' s bespoke forecasting model also considers drivers specific to home collected credit
    • In the Datamonitor View scenario, the market will grow at a slow pace over the next five years
    • In the Optimistic economic scenario, the market will decline gradually over the next five years
    • In the Pessimistic economic scenario, the market will grow substantially over the next five years
• The competitive dynamics of the UK home collected credit sector create further challenging conditions
  • The market continues to be dominated by the ' big four'
    • Provident leads the market with a significant 60.5 per cent share in terms of balances outstanding
    • The big four have maintained their dominant position for many years
  • The majority of competitors experienced a rise in business over 2006
    • Most of the large players in the market saw a rise in balances outstanding in 2006
  • Consolidation is providing some larger lenders with opportunities
    • London Scottish Bank was the target of a number of potential acquisition bids, but nothing materialized
    • Park Group sold its book to Cattles in 2006 after battling with bad debt and difficulty entering the market
  • While some lenders reduce their exposure to the market, others are refocusing on it anew
    • Provident is renewing its focus on home credit, in addition to continuing diversification
      • Provident will be demerging its international division in 2007
      • Provident is renewing its focus on UK home credit as it will be a major part of its business going forward
      • But diversification in the UK will still remain a priority
    • Cattles continues to disengage from the home collected credit market in search of better returns
      • Cattles is instead focusing on its more profitable divisions
    • London Scottish Bank is restructuring its unsecured loan business and focusing on faster growth markets
      • The company is reducing its number of branches as a way of trimming losses
      • Instead it is developing its debt collection and secured lending businesses
    • Home credit still remains its core product, but S&U continues to diversify into other markets
• Lenders need to stay ahead of challenges to benefit from what limited growth the market has to offer
  • Lenders are relieved by proposed regulation, but it will still be difficult for smaller players
    • Regulatory scrutiny has been intense in recent years
      • 2003 saw the first damning report on home collected credit appear
      • The market then came under scrutiny by the Competition Commission
    • Most lenders were satisfied and relieved by the Competition Commission' s final report in November 2006
    • Four remedies are to be implemented that will substantially increase the competitiveness of the market
      • Data sharing will aid in credit decisioning for lenders
      • A price comparison website will ultimately lead to thinner margins
      • Customers will be able to access better information
      • Early settlement rebates will reduce lender profits substantially
      • Importantly for lenders' survival, price maximums have been ruled out
    • But regulatory costs are going to cause difficulties especially for smaller lenders
    • The jury is also still out on whether regulation will help in the long-run if small lenders leave the market
      • In the end, it could be that consumers pay the highest price in the form of less competition
  • With bad debt remaining an issue, lenders are having to readjust their acquisition models
    • Bad debt began rising in 2005 and continued in 2006
    • Lenders are looking to balance quality and volume
      • Lenders are investing in order to make better credit decisions as well as relying increasingly on automation
  • Customers are increasingly depending on more than one provider for their credit needs
    • Customer retention is an emerging issue that will increasingly affect lenders
      • Lenders must look to exploit the advantages of home credit in order to retain customers
    • Credit cards in particular are becoming an increasing competitive and substitutionary force
      • Competition from mainstream lenders has eased up lately due to more difficult economic conditions
      • The future of home credit will nevertheless eventually be in plastic, so lenders should make the move now
    • Though other sources of external credit still remain a small threat, lenders cannot be complacent
      • Government initiatives still pose little competitive threat
      • Overdrafts and basic bank accounts for non-standard individuals are not a replacement for home credit
      • Credit unions do not pose a real competitive threat just yet
      • Alternative commercial sources of credit nonetheless have the potential to pose greater competitive threat
  • Technology will become ever more important to success for the larger lenders
    • Large lenders are rolling out handheld computers to their agents in order to become more cost efficient
      • Though small lenders will not be able to afford such technology, it will not hurt them substantially
    • Lenders are also relying more on automation to improve their credit decisioning
• APPENDIX
  • Supplementary data
  • Definitions
    • AAGR
    • Balances outstanding
    • Bank of England base rate
    • CAGR
    • CCJs
    • Gross advances
    • Non-standard
  • Methodology
    • Sizing methodology for the UK non-standard population
      • Reasons for credit rejection
      • Elimination of double counting
      • Datamonitor uses seven steps to size the UK non-standard population
      • Bankrupts are excluded because of double counting
  • Further reading
  • Relevant links
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
  • List of Tables
    • Table 1: Forecasted UK home collected market gross advances and the UK non-standard population in the Datamonitor View scenario, 2006-2011f
    • Table 2: Forecasted UK home collected market gross advances and the UK non-standard population in the Optimistic economic scenario, 2006-2011f
    • Table 3: Forecasted UK home collected market gross advances and the UK non-standard population in the Pessimistic economic scenario, 2006-2011f
    • Table 4: Estimated market share of the four leading providers in the home collected credit market in terms of balances outstanding, 2002-2006
    • Table 5: Estimated UK home collected credit balances outstanding by competitor, 2002-2006
    • Table 6: Home collected credit gross advances and balances outstanding, 2002-2006
    • Table 7: Proportion of total group balances outstanding for each of Provident' s divisions, 2002-2006
    • Table 8: Cattles' direct repayment and home collected credit customer receivables and numbers, 2004-2006
  • List of Figures
    • Figure 1: The home collected credit market saw an improved performance in 2006 after a number of years of stagnation, 2002-2006
    • Figure 2: Under the Datamonitor View scenario, the home collected credit market will grow slowly up to 2011, 2006-2011f
    • Figure 3: The ' big four' players remain in control of the home collected credit market, with almost 90 per cent of market share in 2006 in terms of balances outstanding
    • Figure 4: Datamonitor' s definition of non-standard
    • Figure 5: A certain degree of subjectivity is needed in a definition of the non-standard population because some lenders are inevitably willing to accept greater risk than others
    • Figure 6: The non-standard population increased for the first time in many years in 2006, 2002-2006
    • Figure 7: The home collected credit market saw an improved performance in 2006 after a number of years of stagnation, 2002-2006
    • Figure 8: Compared to most mainstream lending markets, the home collected market has performed very poorly over the last five years in terms of new lending, 2002-2006
    • Figure 9: In the Datamonitor View scenario, the home collected credit market will grow slowly up to 2011, 2006-2011f
    • Figure 10: In the Optimistic economic scenario, the home collected credit market will decline over the next five years, 2006-2011f
    • Figure 11: In the Pessimistic economic scenario, the home collected credit market is forecast to grow significantly over the next five years, 2006-2011f
    • Figure 12: The ' big four' players remain in control of the home collected credit market, with almost 90 per cent market share in 2006 in terms of balances outstanding
    • Figure 13: The majority of large players saw a rise in balances over 2006, 2002-2006
    • Figure 14: Provident' s international home collected credit division and Vanquis Bank have become increasingly important to the company' s book, 2002-2006
    • Figure 15: Cattles continues to focus upon its direct repayment division at the expense of home collected credit, 2004-2006