The door-to-door lender Financial foresight next week will begin announcing its new online lending business which the Bradford-based company says is the antidote to payday loans.
Known as Satsuma, the online lender will employ 50 people by the end of the year and offer loans at an annualized interest rate of 792%.
Mark Stevens, managing director of the consumer credit division of Provident Financial, insisted that Satsuma was different from other payday lenders because loan repayments were made weekly and there would be no fees. additional in the event of late payment.
From April 2014, payday lenders will be regulated by the Financial Conduct Authority, the city’s regulator which has already established rules limiting the number of times a loan can be extended and the number of attempts. that a lender can do to collect the payments.
Stevens also insisted that applicants for Satsuma loans be contacted to discuss their suitability for the product. “We apply the DNA of mortgage lending – no late fees, certainty, personalized service – in the online marketplace,” he said.
“The problems with the salary mean that it may not be the right choice for everyone and that the salary does not work for people with little room for maneuver when it comes to income,” he said. added.
Campaigners against payday loans have called for restrictions on when ads are shown and tighter affordability controls to prevent clients from being overburdened with debt. More and more people have been shown to be struggling, according to activists such as debt charity StepChange which was contracted by almost the same number of people seeking help in the first six months of this year than the whole of 2012.
Satsuma insists that “there are no additional charges” on his loans, adding: “Customers will never pay a dime more than what was originally agreed, even if their circumstances change.