IPF hit by reduced caps on Polish loan charges

International Personal Finance shares fell after the doorstep lender alerted investors to lower caps on permitted charges in Poland.

The Polish government has proposed cutting the flat level cap for charges on consumer loans to 10% of the loan value from 25%. The additional cap per year would be reduced to 10% from 30% and the combined charges would be cut to more than 75% of the loan value from 100%.

The government's latest proposed change, decided on 25 June, reduced caps further from a week earlier when charges were limited to 20% of the loan value with an additional cap of 25%.

IPF said: "We understand that the proposals will be referred to the EU for review and comment, and may also proceed to parliament for consideration, during which they would be debated and could be modified further. IPF will be contributing actively to this process to seek a more positive outcome for consumers and businesses."

The company said it would report on the potential financial impact when the proposals were finalised and enacted. IPF shares fell 14% to 1.28p at 1035 BST.

IPF lends to consumers through a workforce of 21,000 agents, mainly in Eastern European countries such as Poland and the Czech Republic. In May it reported a solid start to the year despite difficult trading for its Mexican business.