Loan sharks thrive in U.K.
September 1, 2009 | Wall Street Journal, alternatives, industry | Comments (0)As bank credit dries up, desperate people go to illegal lenders. The Pundit guesses that states that don’t have payday lenders have an inordinate amount of illegal lending. From the Wall Street Journal story today:
In a recent report, the U.K. think tank New Local Government Network said it expects the number of people with debts to loan sharks to jump to more than 200,000 in Britain this year, from an estimated 165,000 in 2006. A confluence of indebtedness, poverty and the diminished availability of regulated subprime credit are creating the conditions in which many are borrowing “from nefarious sources,” the report says.
Loan sharks, so named because of their predatory behavior, are seeing a boost from the U.S. to Malaysia, where police launched a recent blitz against so-called au Lang gangs. “During a time like this, predatory informal lenders have the advantage,” said Brian Gurski, who helps educate local communities on basic business practices at LaGuardia Community College in New York.
The answer is well regulated store-front lending.
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