Interactive map by Nassos Stylianou, click each borough for more information
There are 4.1 payday loan shops per 100,000 people in Hackney, the eighth highest rate in London, putting Hackney residents at the top of payday companies’ target list.
Hackney ranked 42nd in the country according to research by The Bureau of Investigative Journalism, commissioned by The Guardian.
Data revealed ten payday loan companies in Hackney, but did not take into account independent payday loan companies and pawnbrokers, instead focusing on the top seven high street leaders.
“Unaffordable credit is extracting wealth from the most deprived communities” concluded a Hackney Council meeting at the end of February. Councillors unanimously condemned what one councillor called “legal loan sharks” and called on the government to take action.
Although they decided that banned payday advertising on council property and public computers and voted that “until such regulation is introduced, Hackney Council should continue to work with partners to do all it can to protect people from usurious lending,” they have not gone as far as neighbouring council Islington.
Islington’s measures to prevent payday loan companies setting up shop will kick in this July, with companies having to go through an application to change the use of a building, rather than it being automatic. Currently, it is difficult for councils to control the spread of payday loan companies, which have no special planning rules.
A spokeswoman from short term lending giant The Money Shop, which has two stores in Hackney, one in an area ranked 895 in England for deprivation out of 32,482 areas, said: “It is a stretch to draw the conclusions arrived at by the BIJ in their analysis.”
She added that their stores could be found “in population centres across the UK, in convenient locations where a broad cross-section of customers live, work and shop” and that “there are many factors for lenders to consider when choosing store location.”
Giving the right advice
Ian Rathbone, Labour Councillor for Leabridge, who backed the council’s call for action said that help and advice was “a much more positive way” to deal with the issue.
“I am completely in favour of total control, even a ban. But in the end it’s about providing enough advice for people to be able to empower themselves not to get into such a mess that they have to borrow in that way and find themselves in a spiral of debt.
“It’s not just about payday loan companies. There are far too many betting shops, far too many casinos and online gambling, which are also destroying people’s lives. It’s not just one problem.”
He said that, despite the high rate of payday loan shops in Hackney shown by the data, “whatever happens with councils, it’s down to the government.”
Councillors have advocated the use of credit unions such as the one on Mare Street, which many people “still do not know about.”
Hackney Council is currently leading a campaign against betting shops in the borough.
@KatieVMarston