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Charity aims to expose the loan sharks

A LEADING Irish charity has called on the Central Bank to safeguard vulnerable people against money- lenders.

The Society of St Vincent de Paul (SVP) has warned of a potential money-lending crisis in Ireland if the Government doesn't publish basic information about how to deal with credit firms.

They want to "take money- lending out of the shadows".

SVP members are becoming increasingly alarmed at the prevalence of money-lenders in the communities they serve.

They are asking the Central Bank to publish baseline data amid fears that vulnerable households are being offered money by doorstep credit firms without sufficient background information being sought.

SVP feel that borrowers from money lenders do not pay due attention to the interest rates as they look for extra cash for a particular purpose.

The charity say that low income is the key factor driving people to resort to doorstep money lending.

 

EXORBITANT

However, they argue that people on low incomes need low-cost solutions to their credit needs, not the exorbitant rates that characterises money lending. SVP criticised the provision of high cost loans to those who are most financially vulnerable.

A sample of typical loans from moneylenders published by the SVP shows that a loan of €1,400 repaid over 52 weeks results in a repayment of €2,184, making the cost of the loan €784. If the loan was €2,000 over the same period the repayment would be €3,120, a massive €1,120 cost to the borrower.

"We need to take money-lending out of the shadows," said Brendan Hennessy of SVP.

"The absence of data on the number of households using regulated money-lenders in Ireland significantly hampers any investigation or analysis on the extent and impact on door step credit in Irish society.

"The Central Bank should publish baseline data on the number of loans and the number of households with such loans and update the information on a six-monthly basis," added Mr Hennessy.

 


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