Provident Financial gains 200,000 customers

by Gill Montia

Story link: Provident Financial gains 200,000 customers

Personal finance provider, Provident Financial, gained 200,000 customers during 2008 as mainstream lenders became wary of borrowers with less than perfect credit histories.

Pre-tax profit for the year rose 12%, to £128.8 million.

The firm reported a 10% rise in customers, to 2.17 million, despite having tightened lending criteria at its Personal Credit business, which proclaims itself as supplying “up your street cash loans”.

Less than 20% of applicants were accepted and chief executive Peter Crook explains: “We have deliberately constrained customer growth to levels which are consistent with lending responsibly in the current environment.”

The company says its bank facilities are sound, adding that it has a cash cushion of £250 million.

Facilities offered by firms such Provident Financial and Cattles are under pressure as sub-prime default rates rise.

However, Provident is confident that its cautious approach and network of 11,000 agents will keep impairment changes level and enable it to grow during 2009.

Meanwhile, Cattles, which trades as Welcome Financial and Shopacheck has this week issued a second profit warning and suspended three directors while referring to a “breakdown in internal controls” at its Welcome Finance unit.

The lender has over one million customers, many of whom are unable to secure credit easily because of poor credit histories.