Collection levels at doorstep lender Morses bounce back
DOORSTEP lender Morses Club expects debt collection to reach pre-pandemic levels by the end of August, as high-interest lenders battle back towards normality.
The Aim-listed company’s home collected credit division recouped cash at 98pc of normal levels in July. The positive update sent shares soaring 22.8pc to 62.6p in early trade, valuing Morses at £83m.
Lending by high interest firms, which typically target customers on the breadline with a poor credit history, all but ground to a halt during lockdown. Businesses such as Morses that collect door to door had a particular challenge, as non-essential contact was banned. The reopening of the economy has made collecting repayments easier, but some lenders have suffered heavily during the pandemic.
Rival Non-Standard Finance was last week forced to halt plans to raise funds after the City regulator found problems in its guarantor loans division.
Morses will keep employees and agents working from home until the end of the year, and could sell off some of its offices as a result. Analysts at Goodbody said they expect costs to be cut as a result of the pandemic.
Morses now has 110,000 customers registered for its online portal, up from 78,000 at the start of the year, as the crisis turbocharges a move towards the internet.
The subprime lender offered a month’s free banking to its U Account customers in July after the Financial Conduct Authority temporarily froze the accounts because of links to the UK subsidiary of collapsed German payments firm Wirecard. The watchdog stepped in to try to protect consumers whose accounts relied on Wirecard’s technology amid fears their money could be shifted abroad.