Old habits die hard in the world of doorstep lending. Last week investors in Provident Financial learnt this the hard way, after it admitted its attempt to modernise cash collections had gone horribly wrong.
The sub-prime lender’s shares dived more than 17% — leaving investors such as Neil Woodford nursing hefty losses — although they have since recovered a bit.
Provident’s doorstep lending business has relied for decades on an army of self-employed collection “agents”. The Lady from the Provvy (they are typically women) knocks on the same doors, usually lending a few hundred pounds while catching up over a cup of tea. This relationship has stood the test of time, allowing the company to ride out recessions thanks to its agents’ knowledge of their