Specialist lender Provident Financial has launched a 21st century version of its traditional doorstep lending operation to win new customers and breathe new life into its consumer credit business which has been suffering from weak demand.

The Bradford-based group has launched an online operation called Satsuma Loans – which it claims will provide an antidote to the widely criticised payday lenders.

Customers will be able to borrow up to £300 and repay in fixed weekly amounts to suit their budget, which Provident said would be both affordable and manageable Mark Stevens, managing director of the consumer credit division said this would solve one of the biggest problems of payday loans which required borrowers to repay the full amount in one lump sum and often led many borrowers to incur additional fees and charges.

He said Satsuma customers would never pay more than the cost agreed at the outset. If their circumstances changed, the loans offered flexibility in the repayment schedule without any extra charges such as late fees, administration fees or rollover charges.

Every new Satsuma Loans customer would receive a call from a representative and be given a contact number to liaise with an ‘online agent’ who would fulfil a role similar to Provident’s home collection agents.

The agents would talk to every customer before a loan is granted to ensure eligibility, to verify that repayments can be met, and to explain the service. The representative will also handle any queries arising throughout the term of the loan.

Mr Stevens said: “The market desperately needs a fresh, different and more responsible approach to short-term loans.

“Satsuma is the only product in the online loans market that meets the core customer needs of certainty, personal service, and affordable weekly repayments. Customers will never pay a penny more than what’s been agreed at the outset, even if their circumstances change. Satsuma is a cheaper and a better alternative to payday loans.

“Crucially, we have maintained Provident’s heritage of contact with the customer, as a Satsuma Loans representative will speak to every customer before a loan is granted, and handle any queries that arise throughout the term of the loan.”

Provident, which has a 130-year track record of lending throughout Britain and Ireland, said Satsuma repayment terms would be over 13 or 26 weeks. The fixed total cost of credit on a £100 13 week loan would be £40, or £68 on a £100 26-week loan.