Provident loss puts jobs at risk
DOORSTEP LENDING ARM TO CLOSE
PROVIDENT Financial is to close its doorstep lending arm after 141 years.
The move will put 2,100 jobs at the Bradford-based firm at risk.
While the division has been shrinking, the closure will also impact 311,000 customers.
Provident boss Malcolm Le
May blamed “changing industry and regulatory dynamics in the home credit sector”.
However, the doorstep lending arm has also struggled to recover from a 2017 botched shake-up of the way agents were employed.
Le May said: “We intend to either place the business into managed run-off or consider a disposal.”
Provident’s roots date back to 1880 when insurance agent Joshua Waddilove saw first-hand how working-class families struggled to pay for essential items. He devised a voucher system which could be used in local shops for clothing, food and coal. Families repaid the vouchers in small weekly instalments.
By the time of Sir Joshua’s death in 1920, the ‘Provvy’ had over 5,000 part-time agents. Provident warned in March the consumer credit arm could collapse, even as it outlined a plan worth £50million to settle a jump in complaints and claims against it.
The firm yesterday revealed losses in the division ballooned from £20.8m to £74.9m last year. However, profits from its two other businesses – Vanquis Bank and Moneybarn – also dived after a fall in customer spending and setting aside funds for loans that might turn sour.
The group swung from a £119m annual profit to £113.5m loss as a result.