37% drop for payday loans issued in Q3 2019

The number of payday loans issued during the last quarter saw a year-on-year fall of 37%, according to FCA data that was published after an FOI request from Wagestream.

The income streaming app revealed that 807,723 payday loans were taken out in Q3 2019 – a 36.8% drop from the 1,277,938 recorded by the FCA in the same quarter of 2018.

Wagestream also indicated the rate of decline in the volume of loans has become more extreme – with the number of payday loans shrinking annually by 34.1% in Q2 2019, by 31.6% in Q1 and 23.2% in the final quarter of 2018 – after the volume of loans had previously been rising.

Furthermore, the number of lenders offering payday loans fell to just 61 firms in Q3 2019 – reflecting a year-on-year drop of 30.7% – down from the 88 companies who were in the market in the same quarter 12 months earlier.

If lenders continue to leave the market at the same rate, Wagestream said it believes there will no longer be any firms offering payday loans by the end of 2022.

The loans registered for the third quarter of this year represented £230.5m of credit — and extortionate interest rates mean borrowers will still have to pay back £398m, according to the regulator.

Payday lender Piggybank left the market last week, which followed the news in October that QuickQuid had stopped trading having refused to pay compensation for previous loans.

Wagestream CEO and co-founder, Peter Briffett, commented: “Our campaign to kill off payday loans has buried Piggybank, Wonga and QuickQuid, and now we’re getting ready to dance on the grave of the entire industry.

“Consumers are getting wiser to how much misery these loans cause, and more and more lenders are fleeing the market every month as they realise how toxic the industry is.

“New technologies such as income streaming, which gives workers access to their earned income between pay cycles, is now moving to mass-market adoption, with leading brands such as Bupa, Rentokil and the NHS leading the charge.

“Wagestream is winning its battle to destroy the payday loan industry. We are also campaigning to end overdraft fees forever and to get all UK workers £250 in savings.

“We won’t rest until our missions are complete, and judging by these figures, we shouldn’t have to wait long.”

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