Prudential profits from loans of over 170% APR

Prudential will find out today how much they have profited from the investments in a lender that charges over 170% APR to people on low incomes. Debt On Our Doorstep has written to Prudential and urged them to re-invest these profits to expand access to affordable credit.

Research by Debt on our Doorstep indicates that Prudential will get a £10million payout from Provident Financial – the UK’s largest door to door lender, which is currently being investigated by the Competition Commission.

A typical £500 loan from Provident Financial, Britain’s largest doorstep lender, requires a total of £825 to be paid back through weekly collections, of which almost £100 is clear profit. Making these loans to their 1.5million customers is a very profitable business – they make over £90 profit from each customer, for the simple service of providing loans to those on a low-income.

Damon Gibbons, Chairman of Debt On Our Doorstep, said:

'Prudential state that they are responsible and that Egg is a loan shark free zone. In fact they are happy to take profits from loans at well over 170% APR and from a company that is being investigated for failing to deliver a fair price to low-income borrowers. They wouldn’t lend at this rate to their own customers so why are they taking the proceeds?'

He continued:

'Prudential’s £10m windfall compares to the Government's financial inclusion Growth Fund for Credit Unions of only £36m over 3 years. They should use it to add further capacity to that initiative. If Prudential are serious about being a responsible lender they would get out of Provident Financial. The least they can do tomorrow is commit these profits to support affordable credit and debt advice providers in low-income communities.'

To register your complaint please send an e-mail to :