Banks tighten lending policy
Published On 2 October 2006
A leading expert has warned consumers that banks are set to begin tightening their lending policies.Paul Marsh, a financial services analyst at Datamonitor business consultants, told Channel 4's 'News at Noon' programme that a recent increase in instances of bad debt could see many companies becoming more scrupulous when lending money.
Datamonitor claims that unsecured personal debt reached the unprecedented level of £215 billion last year and at £3,000 per person, was some three times the European average.
"Banks are now starting to have a lot of bad debt problems; that is an increasing woe for banks," Mr Marsh told the programme.
"People that can’t pay back the debt so they are actually tightening their credit scoring and it is becoming more difficult to get credit products."
The Bank of England recently revealed that some £311 million more was paid off than borrowed on credit cards during August, the best figures since records began in 1987.
