Payday loan companies see increase in loan volumes
America-based Enova International, whose brands include payday loan companies Pounds to Pocket and QuickQuid, says its British businesses experienced a 20 per cent rise in loan volumes during the second quarter compared to the first quarter of this year.
The company appears to have been unaffected by the clampdown on payday loan companies, which was carried out in January, with the Financial Conduct Authority (FCA) imposing stricter rules on lending.
Experts always expected QuickQuid and Pounds to Pocket to be among lenders who survived the clampdown, but smaller rivals have surprised them by not being forced out of business, according to figures provided by The Mail on Sunday.
“We have seen a nice start to the third quarter as well. So we feel really good about our position [in the UK], both competitive and regulatory. Demands looks good in the UK right now. It looks very strong.” said David Fisher, Chief Executive.
Alongside Wonga and Dollar Financial, Enova International is one of the three largest payday loan companies, and during the industry’s peak in 2013, they collectively accounted for approximately 70 per cent of payday loans provided.
Approximately 250 lenders have applied for a provisional licence in order to be able to lend, and are categorised as being ‘high cost, short term’ lenders whilst they operate. Some lenders decided not to apply for a licence, but at the time of writing none have had their licence refused.
The FCA said: “There may still be a fall-out but we won’t see that until firms have complete authorisation, which could take six to 12 months to see if they will continue operating or are unfit.”
A number of firms have been penalised by the FCA, including Wonga, who faced a fine earlier this year.