A lender is set to throw a new lending service into the arena to compete against the likes of Wonga.
Provident Financial is to shortly launch online lender Satsuma Loans with the aim of being the direct opposite of a payday lender. Satsuma will not enforce extra charges for delayed payments and the loan repayments will be made weekly.Mark Stevens, Managing Director of Provident Financial’s Consumer Credit division, explained how Satsuma’s applicants will be served. He said: “Customers will never pay a penny more than what’s been agreed at the outset, even if their circumstances change. Satsuma is a cheaper and a better alternative to payday loans.
“The market desperately needs a fresh, different and more responsible approach to short term loans.
“Satsuma is the only product in the online loans market that meets the core customer needs of certainty, personal service, and affordable weekly repayments.”
By the end of the year, Satsuma is projected to have 50 members of staff and will offer loans at an annual interest rate of 792 per cent.
Payday lenders are set to answer to the Financial Conduct Authority from April 2014 onwards.
Earlier this month, the Regulator proposed new rules for payday lenders, which includes limiting the amount of loan rollovers to two, thorough checks for affordability and clear risk warnings on all adverts and promotions