Payday loans "will be extinct by 2023"
Financial wellness app Wagestream has predicted that the payday loan industry will die out by the end of 2022 after a Freedom of Information response from the FCA revealed the number of payday loans has fallen 37 per cent year on year.
The response also revealed that the number of payday lenders has fallen by almost a third (31 per cent) year on year.
Wagestream predicts that the payday loan industry will be "laid to rest" by the end of 2022 if this trend continues.
The firm said 807,723 payday loans were taken out in the third quarter of 2019, down 37 per cent on the 1,277,938 recorded by the Financial Conduct Authority (FCA) in the third quarter of 2018.
Wagestream campaigns against payday poverty and blames the payday loan industry for trapping low-income workers in a "damaging cycle of credit dependency".
The firm said the rate of decline in the volume of loans is becoming more extreme, according to the data released by the FCA following the FOI request.
The number of payday loans shrank annually by 34 per cent in the second quarter of this year, by 32 per cent in the first quarter and by 23 per cent in the final quarter of last year. Prior to that, the volume of loans had been climbing.
The number of lenders of