Throughout Ireland moneylending is on the rise. MABS (Money Advice and Budgeting Services) confirmed a 20 percent increase in people using their services who have borrowings with a licensed moneylender. This does not take into account illegal moneylending activity.
“People using illegal moneylenders don’t really come near us. There is a lot of intimidation involved and they are very often afraid that something may happen to them. Our advice is for people not to go in this direction – get in touch with us first,” said Michael Culloty of MABS.
According to a recent report by the ILCU (Irish League of Credit Unions) over 40 percent of all consumers are borrowing to meet their household bills, and of these one in ten are borrowing from a money-lender.
Mandy Johnston, a native of Longford and Head of Communications at ILCU, said that the report shows that over half of all consumers are struggling to pay monthly bills on time and the result is increased financial pressure in homes throughout the country.
“Moneylenders have a grip on many communities. Licensed moneylenders are charging up to 190 percent APR and that’s not even to mention the rates charged by illegal, unlicensed moneylenders who target those most in need,” she said.
At MABS there has been a change in the demographic of those using its services.
“People bought mortgages where they felt they would have increments in payments and now that’s not happening. But they still have the same commitments and now they have less finances for simple contingencies such as buying shoes for the kids. A lot of people are availing of the Family Income Support (FIS) allowance,” he said.
He continued: “Nearly 40 percent of the people coming to us have a mortgage. That would be a huge change from before the recession. Also the vast majority have children and are at the family formation stage – mid thirties to sixties.
“We are dealing with a system failure and not a moral failure. People think that they are at fault. Most people are in the ‘can’t pay’ category and not the ‘won’t pay’.”
The Central Bank of Ireland recently confirmed to the Leader that there are 46 licenced moneylenders in Ireland. The ILCU recently called on the Government to implement a cap on interest rates applied by licensed moneylenders as excessive interest rate charges can and do apply. If you are experiencing financial difficulty, visit www.mabs.ie or call 0761 072000 (Monday to Friday 9am to 8pm).