SVP: Central Bank must reveal scale of moneylending crisis
The call has been made by the Society of St Vincent de Paul, which said poverty-stricken families are increasingly offered loans they have no hope of repaying.
Writing in the latest edition of the St Vincent de Paul’s magazine The Bulletin, Brendan Hennessy of the charity’s social justice and policy team said there is growing anecdotal evidence that desperate households are turning to moneylenders for short-term fixes.
Currently, the Central Bank provides updates on whether Ireland’s 49 licensed moneylender firms are operating within regulations, but stops short of revealing the costs of loans, how many have not been repaid, and the number of customers involved.
However, the St Vincent de Paul has warned that unless the State reveals exact figures, the true depth of the problem — and the growing issue of unlicensed moneylenders — will remain hidden.
“We need to take moneylending out of the shadows,” said Mr Hennessy. “The absence of data on the number of households using regulated moneylenders significantly hampers any investigation or analysis on the extent and impact on doorstep credit.
“The Central Bank should publish baseline data on the number of loans and households with such loans and update the information on a six-monthly basis.
“Low income is the key factor driving people to resort to doorstep money-lending. But people on low incomes need low-cost solutions to their credit needs, not the exorbitant rates that characterises moneylending.”
The charity said it is aware of a growing trend whereby licensed operators are actively seeking out new customers by putting leaflets through their doors and contacting them directly.
A spokesperson said that unlicensed moneylenders are also basing themselves outside social welfare and jobseeker offices to target people struggling to cope as the recession enters its fifth year.
A sample of typical loans the charity said are being offered includes a €1,400 loan to be repaid over 52 weeks, with an interest rate that pushes the repayment up to €2,184.
