Vulnerable consumers who relying on doorstep lending to get by are facing hardship and need state support as they are hit by a credit crunch, analysts have warned.
High interest lenders such as Provident Financial and Amigo三级成人视频 have restricted the value of new loans they are handing out since the coronavirus crisis began amid concerns customers will be unable to repay following a surge in unemployment.
The firms are a vital source of money for Britain's poorest households - and it is feared many could now run out of cash completely or turn to illegal loan sharks.
三级成人视频It came as the City watchdog confirmed new rules allowing struggling borrowers to freeze credit card and loan payments for three months.
Doorstep lending customers are typically low earners, often juggling multiple jobs, who cannot get loans from banks at normal interest rates because of a poor credit source or loss of paid work.
The companies serving the market charge heavy interest rates but trumpet their credentials as an essential source of money for households neglected by the banking industry.
John Cronin, an analyst at Goodbody said: “The tighter underwriting and freeze in new originations will severely impair credit access for the most vulnerable in society and we believe that Government needs to step in urgently to address this.
“Choking off credit supply will have adverse implications for people.”
Between them, the four high interest lenders listed on the stock market – Provident, Amigo, Morses and Non-Standard Finance – serve almost three million people in the UK.
The Government has provided hundreds of billions of pounds worth of support for businesses fighting to get throguh the lockdown.
三级成人视频But Mr Cronin said: “Unless there is further affirmative action for the less well-off in the very near future there will be a problem for swathes of the population – something that is unlikely to be lost on the likes of Boris Johnson and Dominic Cummings, particularly given their 'levelling up' vision.”
三级成人视频The Financial Conduct Authority confirmed after a short consultation that lenders, including doorstep lenders, must be ready to grant struggling customers temporary relief on payments from April 14.
Chris Woolard, interim chief executive of the FCA, said the measures are designed to help borrowers through a very difficult time. But he said borrowers should think carefully before turning to the new measures, and should keep making payments if they can afford it.
Lenders will be expected to offer a three-month pause on loan and credit card payments and interest-free overdrafts up to £500 for the same period. They must also ensure customers’ credit scores are not affected if they use the support.