Since the onset of the credit crunch, it has become extremely difficult for anyone looking for additional finance to be able to obtain the loan they require, at least at reasonable interest rates, even if the applicant has a perfect credit rating.

But for someone with a poor credit rating, or problems in their financial history, in many cases it has become almost impossible to obtain a loan, due to the fact that almost all the subprime lenders who offer bad credit loans have been forced to withdraw from the market place in the current economic climate. As a result of this, more and more individuals who have become desperate for funding have turned to loan sharks to meet their needs.

The New Local Government Network (NLGN) has now become concerned at the increasing number of people who are turning to loan sharks, who often charge extortionate rates of interest to borrowers, as they cannot get a loan through more traditional lending routes.

The NLGN believe that there are somewhere in the region of 200,000 individuals in the UK who could be vulnerable and fall victim to loan sharks and they have called on local authorities to provide additional help to this sector of the community by increasing the availability of credit unions and council banks, as well as taking enforcement action against known loan sharks in order to provide additional protection to some of the most vulnerable members of the community.

Chris Leslie, who has written the report and has highlighted the need for action said “Local government has historically been at the forefront of new service provision where community needs exist and have the advantage of proximity to their front line and prime local knowledge. Further intervention from local government is a crucial step and we look forward to strong leadership from the sector at a time of great urgency.”