Britain’s last big doorstep lender has warned it will not survive if it fails to push through a refinancing strategy triggered last month.
Morses Club proposed a £20million customer redress plan and a financial restructuring called a scheme of arrangement.
It wants to draw a line under a surge in claims for loans made over the past eight years where there was deemed to be a ‘potential for harm’.
Chief executive Gary Marshall, pictured, said that if the plan does not work ‘there is no company’
Chief executive Gary Marshall said that if the plan does not work ‘there is no company’, adding: ‘It’s as simple as that. It’s the end of the line. The scheme is the only way to keep the company going.’
A tightening of the market by regulators has already seen Morses’ biggest rival, Provident Financial, close its doorstep lending business in 2021 after 141 years.
But Marshall warned the absence of regulated lenders to more than 12million Britons who ‘can’t access mainstream financial services’ would leave a dangerous void.
‘Clearly, with the economic crisis that is building up, we’re seeing more people coming into this range,’ said Marshall, a former executive at Sainsbury’s Bank.
‘These people have limited options. But, invariably, [after us] it’s unregulated finance.
‘That could be someone at the school gates, someone in the pub, where borrowing costs can typically be 100 per cent a week – so if you borrow £20 you pay £20 a week in interest. From there things become quite horrific quickly.’
