Provident, which recently withdrew from the market, said it would direct those affected by the closure of their mortgage division to their local credit union.
Steve Barras, Business Development Manager for Just Credit Union, said: “While Provident was a controversial high-cost lender, we welcome their gesture in recommending credit unions as an alternative ethical source of lending.”
Until recently, Provident was Britain’s largest subprime lender offering home equity loans through a network of agents spanning over 140 years and had over 380,000 clients.
Steve said: “Home loans involve a lender coming to the borrower’s home to collect repayments, usually at very high interest rates.
“For a while, Provident was the subject of significant criticism for the mistreatment of vulnerable customers.
“The company, along with several other subprime lenders, had been accused of pushing people into debt and failing to see if they could afford to make repayments.
“So while we do not mourn the loss of Provident’s home loans or their online business Satsuma, which also recently closed, we welcome their recognition of the integrity of credit unions.
“There is always the danger, however, that their former clients – and others – will still be tempted to borrow from illegal money lenders or loan sharks.
“These charge extremely high interest rates and often use intimidation and violence to collect payments. We urge all who live or work in Shropshire and Telford & Wrekin to seek an ethical and affordable alternative.
“Just Credit Union is a not-for-profit, member-owned and operated for mutual benefit savings and credit union and we will ensure that all loans are affordable.”
Just Credit Union is regulated by the Financial Services Authority (FSA) and all savings are protected the same way a bank is.