CEO UPDATE: One week in – big challenges and our first steps
Now into my first full week as I started my new role as Chief Executive at the CCTA, I have been taking the first few steps towards implementing the new strategy that we have agreed with the Council.
Having been part of the alternative lending sector for a number of years, I can see common issues affecting many lenders and how we can help with some of the challenges they now face.
I am delighted that CCTA has committed to play a part in ensuring that responsible lending will be there as we come out of these extraordinary times.
It is undoubtedly a tough time for the sector. Taking a minute to look back on the first week in my new role, I was not surprised to see data from the FCA showing thousands of firms are at risk of collapse due to the impact of the Covid-19 pandemic. Our own industry numbers show a dramatic drop in lending when you compare 2019 to a similar period in 2020.
There is a real threat that companies will go under, especially SMEs that do not have the deep pockets of the banks. This will undoubtedly have a negative impact on our customers as the supply of credit would fall further. When this happens, we know the need for credit is still there so consumers look elsewhere, often to less desirable alternatives.
All this underlines the fact that access to alternative credit needs to be maintained, particularly at a time when mainstream lenders will likely seek to avoid risk in uncertain times and tighten their lending criteria.
Customers need to be able to access a range of safe, competitive products. Credit will play a part in us getting back on our feet, getting back to work and juggling our finances.
I want CCTA to be the home for these alternative lenders, allowing us to create a stronger voice for the sector. There are significant regulatory challenges that remain, along with the impact of the pandemic. We need to continue to engage with our external stakeholders on these issues and help them to understand why the sector is vital to the consumers that use it.