I haven’t smelt such rubbish in quite some time, and my front door is also the back door of a cafe!

As it’s quite clear, this isn’t talking about lending people money for houses they can’t afford. It’s about micro loans for setting up businesses and for emergencies.

I’m quite sure that the Tories are fine with poor people being one emergency away from being in hock to a company for years, but back in the real world, there needs to be both a cap on rates and an opening up of who is permitted to offer micro-loans – extending the facilities that say Cooperative banks can offer is one example of something I’d strongly support.

Aaaargh – Well, liquidity is important, but I’d agree…for micro-loans.

http://www.jrf.org.uk/publications/not-for-profit-home-credit

It found that, even with a subsidy and significant set-up funding, it would be difficult to provide a service much cheaper than the existing players. Even the big boys, Provident and S&U, who invest heavily in customer profiling, still have an attrition rate of 30%.

I suspect that if data sharing was easier, and enforcement of consumer credit debts being available to private, rather than court bailiffs, then the 30% rate would decrease significantly. As a result, interest rates could then be reduced as the good clients would not be paying for so many bad ones.

NB My connection knowledge and interest in this sector is due to my shareholdings in Provident and S&U. I also have/had shares in Cattles, but that’s another story.

Surely it would be better to encourage people not to get into debt – amazing how many families in poverty still seem to be able to drink, smoke and have all the latest techie goodies and name brand clothing.

On the other side of the coin, I’d like to see the law changed so debts can’t be sold on or invested against. That would make the lenders a bit more careful.