Doorstep lenders have welcomed an interim report from the Competition Commission showing that home credit customers are satisfied despite the high cost of their loans.

Bradford-based Provident and Cattle plc based in Birstall and Cleckheaton said they were pleased the commission understood the market in which they were operating.

The CC's acting chairman Peter Freeman said: "From the evidence so far it appears that home credit customers obtain the loans they need with repayment arrangements that suit them - but pay a high price for doing so.

"The home credit industry seems to us to provide a service which meets its customers' requirements. Various factors, however, appear to point towards a lack of effective competition which may mean that home credit customers pay more than they should.

"We haven't reached any conclusions in this inquiry and this document sets out only our preliminary thoughts based on the evidence so far. We will now look to discuss these with all the interested parties to find out if competition is working effectively in this market and whether customers are benefiting as a result."

A Provident Financial spokesman said: "It is too early to draw any conclusions from the Emerging Thinking report which is one of the early stages of the Competition Comm-ission's process.

"We pleased to note that the CC's own research confirmed high levels of satisfaction among customers and that agent relationships with customers were good and businesslike.

"The commission recognised that relatively high prices for home credit were driven by factors such as the labour-intensive network of branches and agents. This helps contain bad debt risk and is one of the features most valued by customers."

Cattle plc said in a statement: "We welcome the CC's Emerging Thinking document as part of the inquiry process. We will continue to co-operate with the commission throughout the Inquiry which is due to end in April 2006."

The CC said it welcomed comments on its report by November 18. It will publish its provisional findings early next year with its final findings being made public by next summer.