The future of the short-term credit market

May 13 2015


  • John-Paul Savant (Elevate)

  • Ged O'Neill (Uberima)

  • Russell Hamblin-Boone (CFA)

  • Sue Lewis (Financial Services Consumer Panel)

  • Christine Allison (Archbishop's Task Group)


On April 21, Wonga reported a loss of around £35 million for 2014, on a 47% drop in revenues. Only a couple of years ago, profits were £85 million, and all the talk was of expansion – domestically and internationally.

So, what happened? Well, the key development was that the FCA assumed responsibility for consumer credit a year ago – and, since then, has introduced tough new cost caps, which mean that borrowers should never have to pay more in fees and interest than the amount borrowed. On top of that, short-term lenders will also be required to publish details of their products on at least one FCA-authorised price comparison website.

Even so, at the beginning of last month, the FCA released a report warning of “unacceptable practices from many lenders, including failure to recognise customers in financial difficulty; failure to direct people to free debt advice; and firms offering inflexible repayment options”.

It is clearly an industry in change. Revenues are down; compliance costs are up. And established players (like Wonga) find themselves under pressure from new entrants. The CSFI has long had an interest in this sector – both because it clearly meets a need among disadvantaged groups and because it also raises ethical issues. Indeed, our Financial Inclusion Fellow, Christine Allison, is involved with the Archbishop of Canterbury's initiative to promote alternative sources of short-term credit, with particular attention to community finance organizations such as credit unions. But that is not all that is going on in the sector. We are, therefore, delighted to welcome a panel that includes two of the newest short-term credit providers, a spokesman for the industry itself, and one of the most powerful advocates of regulatory change:

  • John-Paul Savant is the CEO at Elevate International, which operates the (fee-free) Sunny product. Prior to joining Elevate, John-Paul served as the CEO of Think Finance UK; before that, he spent nine years at PayPal.
  • Ged O’Neill is the CEO and co-founder of Uberima, another (fee-free) new entrant into the online short-term credit market. He was previously the COO at Arrow Global, and before that a partner in Root Capital LLP.
  • Russell Hamblin-Boone has been the CEO of the Consumer Finance Association since 2012. He was previously at the Finance & Leasing Association, and, before that, at the British Retail Consortium and the Energy Retail Association.
  • Sue Lewis is the chairman of the Financial Services Consumer Panel, and a trustee of StepChange and Young Enterprise. She previously served as head of savings and investments at HM Treasury.