Doorstep lender profits from rival Provident’s difficulties

Credit lender Morses Club has reported a 25% increase in cash loans as it takes advantage of the difficulties of West Yorkshire rival Provident Financial.

Bradford-based Provident issued its second profit warning of the summer two weeks ago – which resulted in the departure of its chief executive, a 66% one-day fall in its share price, and it being relegated from the FTSE 100.

Provident’s problems stem from a change to its home credit division, as it sought to replace its part-time army of agents with a smaller number of full-time staff supported by technology investments.

The sub-prime lender has been losing agents since January, when it announced its plans, with some of those moving to Morses Club.

Now the Batley company has revealed customer numbers increased substantially by 12% to approximately 233,000, driven by territory builds and organic growth.

Morses Club offers cash loans from £100 to £1,000 to people in financial difficulty. The total credit it issued in the 26 weeks to August 26 has increased by 25%, to £82.2m.

Paul Smith, chief executive officer of Morses Club, said: “We are delighted with all aspects of the progress of the business, reflecting the fact that we have capitalised on market conditions, whilst developing our strategy of product diversification.

“As the second largest lender in this market, we believe that our growth is based on a solid foundation of listening to our customers and adapting to their needs.  Our depth of operational experience is central to our customer service model which consistently delivers customer satisfaction levels of 95% or more.”