The Competition Commission has told home credit lenders they must start sharing data to increase competition in the market in a bid to bring down prices.
However, in its final report on the industry published today it stopped short of imposing a price cap, which it said would hit vulnerable consumers.
For the last two years the commission has been investigating the £2bn doorstep lending industry after unearthing a lack of competition in the market which results in consumers typically being charged £60 in interest for every £100 borrowed.
In August the Competition Commission announced proposals to open the market for doorstep lending, after an initial report said customers were being overcharged by up to by up to £9 in every £100 they borrowed.
It had highlighted concerns that just six lenders controlled 90% of the market.
Today's statement, published after consultation with the industry, confirmed plans first announced in the summer, with lenders required to share data on payment records and to ensure customers who repay loans early get a fair rebate.
Provident Financial, Cattles, S&U and London Scottish Bank are among the institutions using local agents, often middle-aged women, to offer loans to people in their homes at interest rates that are often above 180% but can be as high as 900% APR.
The companies target poorer communities which often do not have easy access to other forms of credit.
Most loans offered are less than £500 and more usually £300.
People typically use them to cover unexpected purchases such as replacing a broken washing machine.
Peter Freeman, chairman of the Competitions Commission and the inquiry group, said: "These measures are designed to open up the market to greater competition so that customers will get more choice and lower prices."
He added: "Better and clearer price information will help customers choose between providers. Customers who settle early - about a third of all borrowers - will also now receive a better deal."
He hopes that rival lenders with access to customers' past-payment records will be more willing to enter the market safe in the knowledge that their loan is more secure, which in turn will drive down interest rates charged.
But in a move that will disappoint some campaigners, the watchdog will not enforce price caps.
Mr Freeman said: "We thought they could have reduced the availability of home credit to the most vulnerable customers, specifically those with no access to alternative sources of credit."
Ed Mayo, chief executive of the National Consumer Council - the body which triggered the investigation - said: "This is an excellent result for Britain's 2 million poorest. They have been paying £75m over the odds every year for these small cash loans collected at home.
"The new obligations on doorstep lenders should inject more competition into this market and bring down the cost to hard-pressed consumers.
"But the Competition Commission's remedies must be accompanied by efforts to increase the range of affordable credit choices for people on low incomes.
"As the Commission's inquiry found, there is no real alternative to home credit. Reforms to the Government's social fund and more voluntary sector credit initiatives would make a big contribution in this direction."
Provident Financial, the largest player in the UK market, said it would continue to work with the regulator.
Bridgewell analyst Katrina Preston said the company had confirmed the impact of the remedies on full-year profits would be around £10m - or a reduction of UK home credit profits of around 7% - as consumers settled debts early.
The commission said most of the proposals were due to be in place by the end of 2007.
Damon Gibbons, Chair of Debt on our Doorstep, commented: "The measures proposed in this report will probably take a further 18 months to impact on the price of credit.
"In that time, lenders will have made another £100m in excess profits.
"Low income borrowers will wonder why it is that the industry isn't being forced to pay that amount as a levy to fund affordable credit provision such as credit unions, or why interest rates aren't being reduced through a cap immediately to ensure they get a fair price."