How rival is cashing in on turmoil at Provident

THE biggest rival to scandal-hit doorstep lender Provident Financial has reported a surge in demand as it is boosted by woes at the stricken firm.

Morses Club also works in the home credit market, where families on the breadline take shortterm loans from agents who visit their homes.

Now, a catastrophic IT upgrade which caused chaos at Provident has driven up demand at Morses by 25pc.

It lent £ 82.2m in the six months to Saturday last week, as customer numbers climbed 12pc to 233,000.

Bosses said this growth was partly down to Provident, which saw its share price crash nearly 70pc in a day after issuing a massive profit warning and axing the dividend.

Provident introduced a new IT system to schedule customer appointments as part of a £21.6m shake-up. But it proved a disaster as glitches sent agents to the wrong houses at the wrong time – meaning only 57pc of money owed is being collected. Moves to sack 4,500 freelancers and replace them with 2,500 staff gave rivals a chance to snap up workers.

Morses chief executive Paul Smith said: ‘It would be churlish of me to say our success wasn’t anything to do with Provident, because they’ve let an awful lot of people go who were surplus to requirements and some have come to us.’

Smith’s business has installed its own new IT systems to cope with greater demand, which allowed it to cope with a major increase in customers.

The Morses chief executive said that it was important new technology did not interfere with the relationship between agents and customers, adding: ‘Keeping very strong ties with the communities that you serve is a critical part of the chemistry of the business.’

Shares in Morses rose 10.6pc, or 13.75p, to 144p yesterday.