The consumer credit market is shrinking, according to the Finance and Leasing Association (FLA), which recently published its latest consumer lending figures.

This means that the number of credit products such as loans, will be limited to consumers.

The secured loan market contracted by 83 per cent in April 2009 compared with April 2008. Unsecured loans (where the customer's house is not used as security) dropped by 45 per cent in value over the same period. Overall, consumer lending by FLA members was down by just under 20 per cent.

The FLA now fears that if the market shrinks further there may be less choice for consumers in future, and that some of the most vulnerable may turn to less reputable and unregulated lenders.

Geraldine Kilkelly, the Head of Research and Chief Economist, said: "These figures show the continued pressure on the consumer credit sector. They reinforce the need for the Government to take action to make wholesale credit available, including in the non-bank lending market.

"Without this, the lack of wholesale credit and the torrent of new regulation currently facing the industry pose the real risk that the size of the market will reduce even further, with serious implications for consumers - especially those who are most vulnerable.

"The Government should take full account of this risk in its forthcoming Consumer White Paper."