Plans for a pay day loan company to be opened in Preston have been approved, amid fears that high-interest lenders “prey on the financially vulnerable”.
Oakam Loans, a firm which provides short term loans with interest rates up to 676.6 per cent APR, is now set to open on Friargate.
The firm submitted plans to Preston Council for the Foot Locker premises, but leaders fear the shop could “make a bad situation worse”.
Preston Council’s deputy leader, Coun John Swindells, said: “Again, we are between a rock and a hard place.
“We’ve probably got enough of these, but it is finding some way of turning them down.
“They are the same business class that covers everything from hot food take aways to travel agencies to financial services to betting shops.
“That’s where councils are really struggling and what we want the government to change.” Coun Swindells said a credit union was set to open in Preston soon and said: “Maybe we can’t stop it, but maybe we can do what we can to try to mitigate them and take there business away.”
Coun Matthew Brown, cabinet member for community engagement and inclusion, said: “I just find it quite depressing. People are suffering losses in their wages, receiving cuts in benefits and it just makes the situation worse when people who have very little money anyway go to pay day lenders and get into a spiral of debt.”
He added: “It’s just going to make a bad situation worse.”
Town Centre Coun Drew Gale added: “They prey on the financially vulnerable. People have no choice but to turn to these companies and it’s just a spiral.” A spokesman for Oakam Loans was unavailable to provide a comment in time for deadline.