Are instant cash loan providers pulling Sheffield into poverty?

Thanks to new figures released by university academics, new fears have arisen that instant cash loan providers are pulling as many as 40,000 Sheffield residents into poverty.

Dr Pamela Lenton and Professor Paul Mosley of the Department of Economics for Sheffield University have published a book together regarding the issue.  Investigating the lives of people who have to rely on no credit check short term loans, the book finds that these payday advance firms may be trapping people in a spiral of poverty and debt.

Many Sheffield natives excluded from traditional High Street lenders do not avail themselves of alternatives such as credit unions, said Prof Mosley.  A director of both Moneyline Yorkshire and Sheffield Credit Union, Mr Mosley remarked that around 40,000 individuals in the region have found themselves trapped in a cycle of debt due to an inability to borrow from traditional lenders.

These Sheffield natives have no choice but to rely upon much more costly ways of borrowing just to make ends meet on a day to day basis, the economics professor commented.  He was highly critical of instant cash loan providers, such as Wonga and Quick Quid, for charging extremely high interest rates, remarking that anyone who pays such rates have high difficulty in actually reaching escape velocity to break free of the black hole that is debt.

The book focuses on the time period starting in 2007, when the UK slipped into a worldwide recession.  Running until 2009, it suggests the riots of the past summer might have been avoided if the less affluent were provided better finance through low-cost loans.

© 2024 All rights reserved. Reproduction in whole or in part without permission is prohibited. See our copyright rules.

What do you think?

Please note that email addresses are not visible on approved comments.