Loan sharks fear as lenders flee High Street

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Lenders fear as lenders flee High Street: ‘Bank of Dave’ boss warns the vulnerable are at risk

  • Dave Fishwick: Banks are still leaving borrowers at the mercy of expensive lenders
  • About 7.1 million people, or one in seven people, struggle to access the most affordable credit
  • Debt counselors say borrowers are increasingly turning to expensive lenders

The self-made millionaire who inspired the Netflix film Bank of Dave has warned that loan sharks are likely to move in if major banks abandon cash-strapped customers.

Dave Fishwick founded Burnley Savings and Loans during the financial crisis because he was tired of companies not being able to get financing for the vans and minibuses he was selling.

Now, 15 years later, he says banks are still using their old tricks: rejecting loan applications, closing branches and leaving borrowers at the mercy of expensive lenders.

“They’re still doing exactly what they did before,” he told the Daily Mail. He fears the banks are leaving the door open for payday borrowers to return by not caring for people who need it most.

‘Banks are doing a runner. There will be very, very few left on the High Street. And then I foresee that the loan sharks will move in again.’ Things are at least worse now than they were during the financial crisis, he added.

Hit: Dave Fishwick, right, and Rory Kinnear who plays him in the movie Bank of Dave

Fishwick recently lent money to a mother who needed £90 to buy formula to feed her baby. He also donated a year’s supply of breakfast to a school in Colne, Lancashire, after the headmistress wrote to him about pupils coming to classes ‘starved’.

“It’s not like people are trying to buy a nice car,” he added.

About 7.1 million, or one in seven people, are defined as potentially financially excluded – in other words, they would struggle to access the most affordable credit.

The cost of payday loans was capped in 2015 amid outrage over people being charged astronomical interest rates by expensive credit companies that many struggled to pay back. It followed Fishwick’s award-winning program The Loan Ranger, which he says played “a huge part” in shutting down disgraced lender Wonga.

“I just saw what their (Wonga’s) 5500 percent APR (annual percentage) did to people.”

Wonga plunged into administration in 2018. Some 200,000 customers still owed a total of £400 million when it went bankrupt following a deluge of compensation claims.

The law now limits the amount of interest and delay fees that can be charged.

For example, someone taking out a 30-day loan will pay no more than £24 in fees and charges per £100 borrowed.

But debt charities warned that pressures on household incomes have led borrowers to increasingly turn to expensive lenders.

Richard Lane, from StepChange, said: ‘An increase in expensive credit lending is worrying as it suggests more people will turn to credit to make ends meet.’

Fishwick community bank has lent more than £30 million to individuals and businesses that had been turned down by High Street lenders. It is run on a non-profit basis.

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