July 9, 2008
Barclays abandons secured loans market
Barclays Bank has announced that it will no longer provide secured loans as a result of what it called slow demand. The bank ,which provides secured loans through its Firstplus business, will cease to issue new loans from 9th August. However, the bank has moved to assure its current customers by stating that their accounts and loan status will remain unaffected by the new changes.
Financial institutions whose main business model is reliant on the provision of secured loans are under pressure from the increasing cost of funds as a direct result of the effects of the global current credit crunch.
A wide range of secured loan providers have already been implementing a series of measures to ensure that their lending criteria is tightened.
A spokesperson for Firstplus stated that the secured loans market did not have the strength or stability to enable the loan provider to further develop its business strategy.