Credit firm sees surge in profits

Government inspectors have recently won back £125,000 in unpaid wages for agency workers

Doorstep lender Provident Financial reported a hike in half-year profits to £53.1 million as it came under fire for charging "extortionate" interest rates.

The Bradford-based firm, whose consumer credit arm sells small loans door to door, said pre-tax profits rose 3.5% and customer numbers soared to more than two million across the group in the six months to June 30.

News of its profits haul came as children's charity Barnardo's slammed the lender for plunging poor families into "worrying levels of debt" and called for an inquiry into industry practices.

Barnardo's claimed Provident was charging interest rates up to 545% annual percentage rate (APR).

Provident revealed that its home credit arm, which trades under the Provident Personal Credit and Greenwood Personal Credit brands, accounted for the bulk of group profits, at £52 million for the half-year.

Revenues at the division lifted 4.9% to £339.9 million.

Provident specialises in offering loans to so-called sub-prime borrowers with non-standard credit histories.

Barnardo's claimed many high-interest lenders "prey on the poor" in its latest report, Counting On Credit, which comes after a year-long study into child poverty.

The charity hit out at Provident's figures, saying "its extortionate interest rates are typical of many doorstep lenders which will continue to flourish unless the Government steps in".

The charity's chief executive, Martin Narey, said: "Many parents turn to high-interest money lenders in desperation."