Doorstep lenders continue to suffer
The news that International Personal Finance, an international doorstep lender with exposure to Eastern Europe and other areas of the world, has seen a significant rise in bad debts is a reflection of the worldwide slowdown. The UK sector has been under pressure for some time although news that Eastern European lenders are struggling to keep pace with their repayments is a further reflection of the difficult situation worldwide.
In many ways doorstep lenders all over the globe were rubbing their hands as the worldwide economy took a significant downturn. However, the prolonged bout of economic indigestion has seen a significant increase in bad debt provisions from these companies even though they are charging often extortionate interest rates. While many who have used doorstep lenders in the past may afford themselves a wry smile there are concerns as to how they may look to reclaim outstanding debts.
It will be interesting to see how governments around the world react to the situation in the doorstep lending sector as for many low-income families around the world these are a necessity rather than an option. Quite who will fill the void left by some of the failed doorstep lenders remains to be seen.
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