NEWS: The impact of COVID-19 on personal lending and the self-employed
Global fintech group, Monveo have revealed first-hand the effects the COVID-19 shutdown is having on personal lending around the world.
The company that provides a personal lending marketplace via a platform that connects lenders with consumers, has seen a significant contraction in the market with a reduction of 30 to 40% in the demand for personal loans.
This dip is largely due to the falling consumer confidence due to job insecurity and economic uncertainty as a result of the COVID-19 outbreak in the UK.
“The ability to actually purchase some products or services that personal loans are used for, has virtually disappeared overnight, ” says Monevo founder and ceo, Greg Cox.
“But other loan purposes like holidays are also affected due to travel restrictions, while major home renovation projects are put on hold, and the house-buying process has effectively paused, ” he adds.
A reduction in the demand for personal loans alone would be significant, however, we’re seeing this negative trend combined with a marked contraction in the supply of credit across nearly all lenders, creating what Cox describes as “a perfect storm” for economic decline.
This contraction in supply has followed two distinct trends; lenders have either pressed pause on lending completely or have severely restricted who they lend to by tightening their criteria and relying on manual underwriting instead.
For some lenders, these changes mean excluding or restricting lending to consumers that are self-employed or work in high-risk sectors such as the travel sector.
Laura is the Junior Reporter at Real Business and Business Advice. She's the first point of call for any PR, business owner or industry insider looking to tell a story of entrepreneurial inspiration, retell some key advice, or a ground-breaking news story. She is the core ambassador for the brand(s) and can be found attending high profile events and meeting disruptive business owners across London and beyond.
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