Payday loans may not just be gaining popularity in America. An article on The Herald Sun recently discussed their effects in Australia, as well. The author also gave his take on the business of cash advances. It’s paraphrased below:
Last week I wrote about a micro-lending outfit called Amazing Loans. It is raising capital on the Australian Stock Exchange to take advantage of a loophole in Victoria and Queensland allowing it to charge huge interest rates and fees on payday loans.
The people who stand to lose from payday loans lenders are those who can least afford it. While lending has become a multi-billion dollar industry in the US, there are fears that Australia’s sinking savings rate may lead us down the same path.
The only practical solution is for the Victorian and Queensland governments to outlaw this practice. This will kneecap the loan sharks and protect vulnerable consumers. So one might think, that is.