tallaght news ©
WaRning of money lenDing cRisis
24TH June 2013 P.O. BOx 3430, TALLAgHT, DuBLIn 24 TeL: 451 3822 email: info@newsgroup.ie web: www.newsgroup.ie
The Society of St Vincent de Paul (SVP) has warned of a potential money lending crisis in Ireland and has called on the Central Bank to publish baseline data to take money lending out of the shadows. Writing in the latest edition of the SVP magazine The Bulletin, Brendan Hennessy from the SVP Social Justice and Policy team says that SVP members are becoming increasingly alarmed at the prevalence of money lenders in the communities they serve. Of particular concern to
the SVP is that vulnerable households are being offered money by doorstep credit firms without sufficient background information being sought.
“We need to take money lending out of the shadows,” writes Mr Hennessy. “The absence of data on the number of households using regulated money lenders in Ireland significantly hampers any investigation or analysis on the extent and impact on door step credit in Irish society. The Central Bank should publish
baseline data on the number of loans and the number of households with such loans and update the information on a six-monthly basis.”
The SVP strongly believes that there is a contradiction in permitting high costs loans, which are significantly targeted at the most financially vulnerable. A sample of typical loans from moneylenders published by the SVP shows that a loan of €1,400 repaid over 52 weeks results in a repayment of €2,184, making the cost of the
loan €784. If the loan was €2,000 over the same period the repayment would be €3,120, a massive €1,120 cost to the borrower. The experience of SVP is that borrowers from money lenders do not pay due attention to the interest rate. Their focus is on the principle borrowed for a specific purpose. In one Dublin SVP Conference members noted that “no one has ever either admitted or been able to tell us what the interest rate is.”
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