I watched the Panorama programme “Easy Money Tough Debt” which presented the issues faced by many people on the margins of our economy struggling with high cost debt. The problems and stresses caused to them were well presented but I was disappointed that, apart from pushing for a “breathing space” for those with unaffordable debt, they did not offer any solution, when the solution is out there in the form of the good, not for profit, ethical lenders like Purple Shoots and other members of the Responsible Finance Association. I suspect the reason for this is that Panorama either don’t know about us or consider us all too small to include. But the reason we are all small is that we all struggle to get financial backing to scale up what we do – and the reason for that is often because we do not set out to make profits and therefore cannot offer the level of return that even Government backed funders such as Big Society Capital or British Business Bank want to see.
The reason the high cost providers charge so much is that they are profit-oriented – and they have no difficulty raising funds because they can offer a good return to an investor, so they have money to spend on TV ads and Google. If the Government and media are serious about tackling the exploitation of the poor by these high cost, unethical providers, it cannot be done just by introducing more regulation to limit what they do. Unless a proper alternative is supported to replace them, this will only make matters worse for the people forced to resort to them. I do think that the Panorama programme did not make the reason why people are forced into the arms of the predatory lenders well enough – most do not go to them for some luxury they can do without but out of necessity to cover basic living costs or items like school uniform, broken fridges, transport (to hospital appointments, DWP appointments etc) – these are people on benefits and also the many people in badly paid jobs.
Providers like us are not profit driven but driven by the desire to change and improve communities and the lives of individuals like these – our lending is entirely ethical and people-focussed. However, because we don’t make profits we struggle to get support from a Government which at the same time condemns the high cost profit making providers. I think this double standard needs to be recognized and addressed. If they really care about poverty and the predatory lenders who compound it (and perhaps the question is “do they?”), they should consider proper support for the good alternatives.