High-Interest Loan Market Size
The market size of the high-interest loan market in Canada for 2010 and 2014 are $1.21 billion, and $2.19-billion respectively. According to the Canadian Consumer Finance Association, information on the recent size of the high-interest loan market is not available due to a decrease in the number of businesses in the industry, difficulty of doing business, and regulation of the industry by the authority.
High-Interest Loan Market Size and Overview
- The term, high-interest loan is defined by multiple sources including the Atlantic Provinces Economic Council (APEC), the Canadian Consumer Finance Association (CCFA), the Canadian Bankers Association (CBA), and Investopedia as a "type of short-term borrowing where a lender will extend high-interest credit based on a borrower’s income and credit profile."
- High-interest loan is synonymous with payday loan.
- In Canada, high-interest loan (payday loan) lenders charge between $15 to $25 as interest per $100.
- The annual interest rate, including other fees for borrowing a $100 payday loan is over 500%.
- According to the Canadian Payday Loan Association (Canadian Consumer Finance Association), the size for the Canadian high-interest loan market was $1.21 billion in 2010, from 2.53 million payday loan transactions.
- In 2014, the market size for the high-interest loan industry was $2.19-billion, from 4.47 million payday loans.
- According to an unpublished report by Deloitte LLP, Ontario, the biggest high-interest market in Canada, generated $1.4 billion through its 549 businesses in 2016.
Other Market Statistics
- The number of high-interest loan (payday loan) businesses in Canada decreased by five percent, from 1,434 in 2014 to 1,360 in 2017.
- Currently, there are about 961 registered high-interest loan businesses in Canada.
- The number of Canadians using high-interest loan increased from one in 50 in 2009 to about one in 25 in 2014.
- Almost two million Canadian use the services of high-interest loan industry per annual.
- According to Canadian Consumer Finance Association, the high-interest loan industry in Canada has experienced a negative growth in most recent time due to over regulation of the industry by concerned authority and proliferation of unregulated e-lenders.
- The number of consumer payday loan insolvencies in Ontario increased from 32% in 2017 to 37% in 2018.
The research team leveraged information publicly available on the Canadian high-interest loan industry authorities and associations databases, such as the Canadian Consumer Finance Association, the Atlantic Provinces Economic Council (APEC), the Consumers' Association of Canada, and Association of Community Organizations for Reform Now (ACORN), as well as media source like the Globe and Mail Inc, the Jerusalem Post and BNN Bloomberg to provide most of the requested information.
While we were able to uncover the size of the industry in 2010 and 2014, information on the recent (2015 and 2019) market size is not available (it has not been computed, possibly), according to the Canadian Consumer Finance Association. Search for the 2015 and 2019 market size of the industry in market reports further support this claim as no market report with this information was found, not behind a paywall. Attempts to triangulate a proxy for 2015 and 2019 were made but lack of data points such as the annual compounded growth rate (CAGR) from 2014 through 2019, average revenue per business in the industry, and average high-interest loan borrowed by Canadians undermined our attempts.
Note, the term payday loan and high-interest loan were used interchangeably throughout the report.