Sound management is the most important attribute in any business. Poor management can destroy a business. Where a business is operating in the subprime lending market, it can wreak havoc on its customers.
In the case of the Provy, its 800,000 doorstep lending customers no doubt rely on it as a regular source of funds.
They are at the bottom of the credit ladder, with few other possible sources of finance. They were typically paying 535% APR.
Did management not understand their sub-prime finance business model? Coupled with major technical issues, this could be a toxic combination. The subprime world is very tough and when things go wrong, they always mushroom quickly.
New salesforce scheduling software seems to have failed, with debt collectors being sent to the wrong addresses at the wrong time, or to homes already visited by colleagues. Loan repayments have fallen off dramatically.
The 130 year-old underlying business, as operated by other companies, is viable, but effective action needs to be taken promptly to avoid a meltdown and to service its customers.
Warning signs were there: Management should perhaps have been called to account after its disastrous acquisition of Yes Car Credit?