Are women turning to short term loans at an increased rate?

New research has shown that, with the global economic downturn and stricter thresholds to be met on borrowing from traditional sources, more women are instead turning to short term loans in order to gain access to cash loans.

This trend has become a cause for concern to some payday advance industry critics, as they say major lending firms have embarked on expensive television advert campaigns, spending millions to purchase air time during programmes such as Friends and Glee.  Other lenders have set up online websites in order to target women specifically, and these experts say that language on the sites stresses the ‘socially acceptable’ nature of taking out such a loan.

Anti-debt campaigner and Labour MP, Stella Creasy, is one of the largest payday industry detractors.  Ms Creasy said that women are ‘falling prey’ to payday lenders.

These women, who have a regular income and are working, are able to repay a portion of their lending, she added.  However, women are subsidising these lenders through paying for extensions and penalties on any unpaid portions of their loans, Ms Creasy also said.

Women seem to be nearly as likely to be saddled with heavy debts as their male counterparts, according to a recently published report from RSM Tenon.  The accountancy firm found that out of last year’s insolvencies, women made up 49 per cent of the total figure.

Ms Creasy has called upon the government to more tightly regulate the payday lending industry by both instituting a cap on payday lending interest rates and to offer alternative forms of credit for those with financial vulnerabilities.

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