The number of new clients signing up with debt management company FSA Group for help setting up informal payment arrangements or debt agreements with their creditors fell 58 per cent in the year to June – another sign that COVID stimulus and forbearance measures are having a lasting positive impact on household finances.
The big drop follows a 66 per cent fall in client numbers in 2020/21. New clients for informal arrangements and debt agreements have fallen from 4327 in 2019/20 to 620 in the year to June. Clients under administration have fallen from 19,736 to 11,252 over the same period.
The company said in its 2021/22 financial report that it expects demand will start to return in the current financial year.
FSA is also a mortgage and consumer lender, and its focus is now on that side of the business. During the year it acquired an asset finance company and added A$81 million of vehicle and equipment loans to $72 million of personal loans and $389 million of home loans.
The personal loan pool grew 11 per cent during the year and the mortgage pool 2 per cent.
Up to now FSA has generated business through direct channels but its plan now is to establish broker channels. It said the same thing in last year’s financial report, so it remains to be seen how it will go.
For the year to June, FSA Group made a net profit of $18.7 million – a fall of 9.8 per cent compared with the previous year. Income fell 5 per cent to $58.2 million.
Lending contributed $13.7 million to the total and debt management services $5.1 million.