An upsurge in Loan Sharks

Every year over Christmas people from all walks of life indulge in giving receiving and lots of eating, drinking and celebrating. A beautiful yet very costly tradition for some, many people will save or pay cash for their splurges the old fashion way – and there are those who will put their festive shopping on plastic or take out some type of advance for the occasion.

With the economic down turn and after the banking crises, most high street banks and lending institutions became less inclined to risk lending to those in lower incomes and with low assets considering them a higher risk and unattractive borrowers; thus forcing them to seek alternate means of borrowing.

According to a report – commissioned by the affordable housing provider Circle Anglia and written by the Financial Inclusion Centre (FIC) – more than 100,000 of Britain’s poorest families will be crippled this year with a combined debt of around £82m after borrowing money from loan sharks to pay for their Christmas. The value of these loans are estimated to be £29m at an average interest rates of 825% which means that borrowers will end up paying nearly three times the initial borrowed amount. Thus benefiting only the criminal element on this equation!

The report also found that illegal doorstep and loan shark activities are on the rise and has increased rapidly (by 22%) in the last three years from 165,000 families to 200,000 – half of which are Christmas time accounts.

The big questions are – where is the government and what are they doing to tackle illegal money lending? How is it fair for the public – without being consulted- to bail out the banks – who as a result of that bail out are now enjoying large windfalls – but when the weakest and neediest of the public need to use the banks services they turn their backs on them? And nobody is asking any questions. Furthermore, where are the credit unions and the rest of the community financial organizations, where is their social responsibility, what are they doing to help the weak in they society!!?