IPPR proposes payday-loan levy
Thinktank report suggests not-for-profit lenders could be sited in Post Office branches and compete with firms such as Wonga23 April 2014
A one-off levy of £450m on Britain's £180bn consumer credit industry could create enough affordable lenders to take on Britain's legal loan sharks, according to a report from the centre-left thinktank IPPR.
The proposals, which are being considered by Labour, say that as well as a legal cap on the total cost of credit, Britain needs a new generation of not-for-profit affordable lenders with enough capital liquidity and geographic coverage to compete with firms such as Wonga, QuickQuid and Payday Express.
The payday lending industry provides more than 8m loans a year, and has expanded from loans worth an estimated £100m in 2004 to more than £2.2bn in 2012-13.
Two-thirds of those who take out a payday loan have a household income of less than £25,000.