Feast to Famine

The report, commissioned by Consumer Focus, sets out how consumers on low incomes with no savings are being hit hardest as high street lending dries up – and many will be forced to borrow from unregulated, sub-prime money lenders unless Government makes new, affordable forms of credit available.

Gross lending is down 60 per cent on this time last year² leaving many desperate consumers with little choice but to turn to the informal, sub-prime lending sector – often known for extreme rates of interest (sometimes over 1000 per cent APR), unfair terms and conditions, and at worst, illegal scams and aggressive sales tactics.

The authors note that while past lending excesses need reigning in, access to credit in the short-term can be vital for vulnerable consumers – such as those who have been made redundant and need short-term loans until benefit or payment protection insurance (PPI) payments take affect.

The report is intended to stimulate debate and calls on Government to consider a range of options in developing its G20 assistance package to make new, more affordable forms of credit available.

Feast to Famine