With unemployment rates expected to rise sharply following the pandemic, the number of potential borrowers with poor credit files is only set to grow. But the sector that exploded after the last financial crisis is suddenly fighting for survival and there are few firms left to cater to the growing demand.
Amigo Loans, which lends to borrowers with lower credit ratings if a friend or family member guarantees repayments, was considering administration this week after it failed to win approval for a redress scheme to settle a huge backlog of customer complaints.
Paul Smith, chief executive of Morses Club, which will become the UK’s largest doorstep lender after Provident’s exit, said the company had not suffered as much as some rivals but “we’ve all had this issue. 50 per cent of the claims we receive, we’ve never even dealt with the customer.”
Morses Club PLC (LON:MCL) is an established, relationship-driven consumer finance provider offering a range of credit products and delivering exceptional services to customers in the non-standard finance market.