Update on NCC super-complaint

Provident Financial PLC
14 June 2004



       Provident Financial responds to the National Consumer Council's '
               super-complaint' against the home credit industry


This super-complaint will enable the true facts to be established about home
credit and its customers.  Home credit is a valuable service that is too often
misunderstood.

Provident Financial welcomes NCC's acknowledgement that 'home credit is a
valuable source of credit for people on low incomes'; and that it offers a '
popular, convenient and unique service to customers'.  We are also pleased to
note that NCC thinks a ban on home credit 'would not be in the interests of
low-income consumers'.

Moreover, we welcome NCC's acknowledgement that 'APRs are not always the best
indicator of cost, especially for short-term cash loans'.

However, we believe that the NCC has misunderstood the increasingly competitive
nature of the small sum credit market, of which home credit is an important
part.

NCC says that home credit customers 'are effectively captive customers' who have
little choice.

In fact, Provident's home credit customers:
     
•    are increasingly aware of other small sum credit products - for example, 
     80% of Provident's customers are aware of Capital One credit cards

•    increasingly shop around when considering their next credit purchase - 56% 
     of Provident's customers say that they shop around

Furthermore, 72% of Provident's customers use another credit product in addition
to home credit.  These are not captive customers without choice.

The increasingly competitive nature of the small sum credit market and of the
home credit sector is evidenced in the results of Provident's UK home credit
business.  Over the last five years Provident's lending has only kept pace with
inflation - growing by 2.75% pa in the midst of a credit boom.  Increasingly,
Provident's growth has come from international expansion and broadening its
range of credit products.

The NCC also says that new companies face economic and operational barriers to
entry into the home credit sector. The evidence is to the contrary. 146
companies have entered the home credit sector during the last five years. Some
operate at a local level and on a small scale whilst a number operate across a
wider geography and on a larger scale.  Barriers to entry are low.

Provident Financial will offer the OFT every assistance in its examination of
the home credit sector.



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