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Recession 'could force people to use loan sharks'
More people are likely to turn to loan sharks during the recession, as they struggle to access credit from traditional sources, it has been claimed.
Think tank the New Local Government Network (NLGN) said it believes an additional 35,000 people will use the illegal lenders during the recession, but said the figure could be even higher.
In a new report entitled Circling the Loan Sharks, it said a combination of reduced sub-prime lending and the economic downturn may contribute to this predicted rise.
The NLGN is now urging local authorities to invest more money into local credit unions to help people who cannot access high-street loans.
Credit unions lend to people once they have earned a record as a reliable borrower and only grant a loan for as much as they know the borrower can repay.
Chris Leslie, author of the report, said: "Further intervention from local government is a crucial next step and we look forward to strong leadership from the sector at a time of great urgency."