Annual Report 2017
morsesclubplc.com

Strategic report

Governance

Financial statements

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Strategic report

Governance

Financial statements

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Strategic report Business Model

Morses Club is the UK’s second largest Home Collected Credit (HCC) lender with c.216,000 customers nationwide and a management team with significant experience in HCC and consumer finance.

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The Lending Process

1 Develop products to meet customer's needs
  • - Loans for those who struggle to find credit elsewhere
  • - Loans of £100 to £1000 available
  • - New customers eligible to borrow up to £400
  • - Existing customers eligible to borrow up to £1000
  • - Morses Club Card launched in early 2016
  • - Loans offered in cash or on a Morses Club Card
2 Attract and retain customers
  • - Morses Club website and online channels
  • - Agent workforce
  • - 'Refer a friend' scheme
  • - Social media
3 Loan application process
  • - New customers can apply online, via an agent or by phone
  • - Existing customers apply via their agent
  • - Customers receive an Agreement In Principle (conditional on satisfying our credit checks and lending criteria)
  • - Details sent to customer’s local branch for assigning to an agent
  • - Agent calls to arrange an appointment to finalise the loan
4 Loan completion process
  • - Agent conducts affordability checks in the customer’s home
  • - On approval of all checks, agent issues cash or Morses Club Card loan (customer’s choice)
  • - Agent agrees a regular weekly repayment day and time with the customer
  • - No hidden charges or penalty interest rates - transparent for customers
  • - Advanced technology and equipment underpin loan sales and completions (agents and field managers have advanced personal tablets to support consistent UK-wide customer service)
5 Collections and loan maintenance
  • - Repayments collected weekly by agents
  • - Experienced agents, familiar with their customers’ communities
  • - Agents are self-employed and paid in commission
  • - Frequent contact with agents means there is always an open channel of communication with customers
  • - Issues identified quickly and sensitively, supporting customers in difficulty
  • - Robust complaints process
  • - Customer satisfaction consistently above 95%
  • - Customers cite agent relationship as a top reason for high satisfaction
6 Appropriate repeat lending
  • - Additional loans available for suitable customers
  • - Affordability checks are completed for every single loan
  • - Proactive customer retention process (eg marketing campaigns, retention reports, paid-up customer research)

What Makes Us Different?

Treating the Customer Fairly is embedded into our approach to lending. The interest charged is agreed up-front for each loan - we never charge additional interest, even if the loan extends beyond its original term.


How this creates value

We use retained earnings and lower cost debt facilities to lend to our customers at a margin, and control the lending risk and costs in order to deliver consistent shareholder returns.

Our ability to do this successfully relies on:

- an established national infrastructure of experienced agents and management to deliver the right products to the right customers;

- technology to ensure regulatory compliance and efficient processes and controls;

- well-considered compliance and controls to maintain our ethos of the customer being at the centre of everything we do;

- a customer base of c. 216,000 that brings economies of scale to the organisation;

- an experienced management team with a clear understanding of the dynamics of non-standard lending; and

- vision and technology to enhance the services to existing customers and develop into the broader non-standard lending space.