Credit lender sees strong growth in customer numbers

Doorstep lender Morses Club reported strong growth with customer numbers rising 9 per cent to 216,000 over the past year. The Birstall-based firm said total credit issued rose by 18 per cent to £144m, reflecting expansion and acquisitions.

Morses Clubs CEO Paul Smith said the group is planning to expand into consumer rewards

The gross loan book ​rose​ over 4​ per cent over the past year​. The proportion of loans to highest tier customers increased by 10​ per cent as the ​firm focuses on higher quality lending. The group expect​s​ to report impairments in line with ​guidance.

​​​Morses Club​’s CEO ​Paul Smith said:​ ​“We have invested to streamline processes, and reduce cost, further demonstrating our commitment to develop technology to keep us at the forefront of our core ​home collect credit​ market and broaden our offer to the wider non-standard consumer finance sector.​”

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The group is planning ​​to expand into consumer rewards, interactive and mobility-based customer communications channels, social media​, banking and card-related services.

“We remain confident in our outlook, with a strong pipeline of territory builds for our growth plan, and continue to see attractive acquisition opportunities in the ​home collect credit and the wider non-standard finance markets​,​”​ said Mr Smith.

​​Analyst​ Shailesh Raikundlia ​at Panmure Gordon said: ​​“Although the ​​FCA’s investigation into the high-cost​ ​credit sector appears to be weighing on the sub-sector, the group continues to operate a high margin, lower leverage and low capital intensive business.​”​​

​The FCA ​is looking at all high-cost products to build a full picture of how these are used, whether they cause detriment and, if so, to which consumers. This will enable the FCA to ​decide whether further policy interventions are needed.

Andrew Johnson at the Money Advice Service said: “Home credit or doorstep loans can often be an expensive way to borrow money so it is important to look at all options available to you before taking out this type of loan. Home credit loans are often for small sums, between £50 and £500 but the interest rates can be high, in some cases up to £1,500 per cent APR. So you need to make sure any payments are affordable and you have a plan to pay off what you owe quickly and on time.”

Morses Club said a £200 loan repayable over 20 weeks ​would incur a 50 per cent rate of interest so the customer would pay back £300 in total.