On 10 May 2021, The BBC reported that Provident Financial has withdrawn from doorstep lending after 140 years. This lending has been reported as controversial, approaching people at their homes and re-lending repeatedly, sometimes putting people into financial difficulty. The BBC report:
“Its lending is legal and approved by the City regulator, but it has been controversial. Some campaigners regard such operations as “legal loan sharks”.
One 52-year-old, who borrowed with Provident for 30 years, said he had taken loans totalling £60,000 but it was a “vicious circle”.” (BBC, 10/5/21).
In spite of this, it is also true that the gap left by this home credit provider may leave the door open for loan sharks. Credit Unions do not generally provide home credit, however, they do lend to people who struggle to get credit elsewhere, as part of their mission and business model.
Directing people affected by Provident’s withdrawal from this market, to a local credit union could certainly help! Not-for-profit, ethical and based firmly in the community, Thamesbank Credit Union has for many years providing small to larger loans to local people, and even more experience in local communities prior to this. Loans are always assessed for affordability, to avoid putting people into financial difficulty, and building savings are always encouraged, to build up financial resilience longer-term.
Commenting on the decision for Provident withdrawing from doorstep lending, ABCUL CEO, Robert Kelly said: “ABCUL notes the decision of Provident Financial to close their doorstep lending activity and to exit the High-Cost Credit Market. This type of lending has been a real scourge on consumers across the country for far too many years and has had a significant detrimental impact on the lives of so many people, particularly those in vulnerable circumstances.” (ABCUL, 12/5/21). He went on to say:
“Consumers deserve fairer and more responsible financial products and services that are affordable and responsible in nature and which build financial resilience in communities and workplaces across the country – that typifies the credit union business model as THE ethical alternative within the financial services marketplace.” (Robert Kelly, ABCUL, 12/5/21).
Thamesbank Credit Union would like to urge local people who have used Provident or have friends, family or acquaintances who have used them, approach Thamesbank Credit Union first, to see how we can help. Loan sharks cannot be allowed to benefit from this, and local people need to be protected from illegal lenders at all times.”
Article posted by ABCUL – ABCUL Comments on Provident Financial Withdrawing from Doorstep Lending