The state’s biggest money lender is to write off the debts of all of its borrowers in an unprecedented move.
rovident is closing its doors here and has decided that anyone who owes him money will have their debts wiped out.
It is believed to be the first time that there has been a massive write-off of the debts of all its consumers by a financial institution in this market.
The lender will also make sure that the balance has been cleared on the credit report of its customers.
The London-based company has thousands of borrowers in this market and has been operating there for years.
He did not answer questions, but it is believed he decided it would be too complicated to collect overdue debts now that borrowers know he is pulling out.
Its debt collectors are self-employed, and many of them have already left now that Provident is shutting down.
The Provident website says, âIf you have an outstanding balance on your provident loan (s), we have good news for you.
âWe stopped collecting payments at 9:30 am on June 28, 2021.
âAny balance remaining after this date is now refunded. There are no more reimbursements to be made to your agent or to your provident fund. Indeed, our lending activity in Ireland closes on July 1st. “
All loans of â¬ 500 or more must be notified to the Central Credit Register of the Central Bank.
However, Provident said that if customers have borrowed â¬ 500 or more, it will update their credit report to show the balance has been cleared.
Provident ends its subprime loan operations in this country and at its UK base.
The home loan operation has been losing money in both markets since before the pandemic.
It has been hit by a huge increase in customer complaints which has sparked an investigation by the UK regulator, the Financial Conduct Authority.
Approved lenders in Ireland typically charge over 86pc, while some charge up to 288pc after collection fees are added.
It is estimated that there are over 280,000 clients of money lenders here.
The Central Bank of Ireland said it was aware of Provident’s decision to write off the debts.
âProvident informed that he had contacted all of his clients to inform them of this decision, that any balance remaining on their loan money loan (s) is considered to have been repaid and that their credit report will be updated accordingly â, It said.
Credit unions hope to fill void left by Provident’s departure.
Kevin Johnson, chief executive of the Credit Union Development Association, which has 50 credit unions among its members, said Provident customers should contact a credit union.
âCredit unions have a long history of lending and supporting members of their communities, whether the need is â¬ 400 for a washing machine or â¬ 40,000 for a complete home renovation,â he said.
“We suggest that former Provident borrowers speak to their local credit union if they need credit in the future.”
The Irish League of Credit Unions (ILCU) has said that the cost of a credit loan is much lower than that of borrowing from a money lender such as Provident.
Paul Bailey of ILCU said that as soon as a person becomes a member of a credit union, they can apply for a loan.