Credit crunch spreads to personal lending

By Leith van Onselen

While all the focus has been on the housing credit crunch and the sharp slowdown in mortgage lending, it’s easy to miss the fact that personal lending has also taken a hammering, falling for more than three consecutive years:

Now there are fears that in the fallout from the banking royal commission, banks may also make it more difficult to secure personal loans. From The SMH:

Banks may make it harder for consumers to get car loans, credit cards and personal loans under proposed rules from the corporate regulator…

Macquarie analysts said… “we see further underwriting process tightening in other lending categories (for example, personal loans and credit cards)… we expect non-mortgage credit availability to reduce”…

If true, this would present yet another headwind for Australia’s consumer economy, which is already reeling from the housing bust and comprises around 55% of Australia’s growth:

The neutering of the Aussie consumer is behind several analysts’ warnings that Australia faces a strong chance of recession later this year.

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