The Anonymous Widower

Is it Usury?

I was rather surprised that Provident Financial, who reported good results this week, charge some of its customers an interest rate of up to 545% on loans.  Martin Narey of Barnardos is not amused.  And neither am I!

But to criticise the company is wrong, as they are merely filling a gap in the financial services market, that should be catered for by micro-finance companies and credit unions.  As to the latter it has always puzzled me why they have such a low profile in this country, compared to the United States.  They seem to be ideal for the times and also for lending small amounts of money in more stretched communities.  Especially, as any profits stay in that community.

Could it be that the regulations are framed to protect the banks?  After all, no credit union has ever taken the Chancellor of the Exchequer to the British Grand Prix or other major sporting event.  And they probably don’t pay anything to the government, except perhaps VAT and Income Tax for employees.

At least though, the spam I used to get from doorstep lenders like Providential has stopped. (They didn’t send any incidentally! Or not to me at any rate!) This offered me loans at high rate and it came from spam companies in the United States.  However, a letter to my MP, who talked to the government, stopped the process in days. 

There’s another moral in that tale.  Don’t underestimate the power of your MP! If you have a problem write to them!

July 30, 2009 - Posted by | Finance, News | , ,

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