Loan sharks the option for millions

Friday, November 25, 2005

A report from the Housing Corporation has found that millions of Britons face the prospect of having to deal with loan sharks and unscrupulous lenders due to their inability to secure a loan or credit from a recognised bank.

The Housing Corporation says that almost three million people have no access to mainstream banking, making them vulnerable to loan sharks and unable to carry out day-to-day financial transactions.

"It means the things we take for granted, being able to use direct debit, being able to have a wage paid into a bank account, being able to use a cheque book, being able to take out a small loan and pay it back over a period of time at a reasonable interest rate, they can't do any of those things," said John Rouse, Housing Corporation chief executive, on BBC Radio Four's Today programme.

Mr Rouse went on to say that people who have to interact with loan sharks and unscrupulous lenders often repay at interest rates of between 100 and 400 per cent.

The Housing Corporation was set up to support communities across the country by subsidising the supply and regulating the quality of affordable homes and related issues for people like the three million who do not have a bank account.

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