Lewisham has been named capital of short term credit

Payday loan advertising banned on Tower Hamlets Council property Pic: Jack Simpson

Payday loan advertising banned on Tower Hamlets Council property Pic: Jack Simpson

Lewisham has been dubbed the ‘UK’s capital of short-term credit’ after new stats were published by the Bureau of Investigative Journalism yesterday.

The data shows that Lewisham has the highest concentration of short-term lenders in Britain, with 7.6 stores for every 100,000 residents.

Lewisham ranks above Harlow (7.3 stores) and Halton with (7.2 stores) who rank second and third, respectively.

It even outstrips Glasgow, the area with highest number of short-term loan stores in the country with 40, when it comes to density of stores per 100,000 residents.

In their research, The Bureau found that lending shops were disproportionately located in impoverished communities.

According to the Indices of Multiple Deprivation, published by the Department for Communities and Local Government, Lewisham was ranked as the 16th most deprived local authority in England.

Sir Steve Bullock, Mayor of Lewisham, has already warned residents of the dangers of short-term lenders.

He said: “Many payday lenders charge an extortionate level of interest and prey on the most vulnerable in our community – those people who are already struggling to get by. Interest rates charged by payday lenders are so high that people often have no hope of paying the interest back let alone paying off the original loan. Many residents find themselves trapped in a downward spiral of debt from which they can never recover.”

Sir Steve added: “I want people to be aware that there are much better alternatives. For instance, in Lewisham we have two local credit unions that offer great value loans as well as ethical savings plans that are fully protected.”

The Bureau’s data includes the country’s seven largest chains that offer short-term loans and only those branches that offer short-term loans of one year or less. It therefore does not include the hundreds of smaller independent operations that exist up and down the country.

Even so, the data reveals that there is one short-term lender for every seven banks or building societies in the UK.

This investigation is the first time all the stores operated by the biggest suppliers of short term credit have been mapped, as previous data of the spread of lending shops relied on local surveys.

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