Is This the End of Regulated PayDay Loans?

Morses Club (LON:MCL) – current shares must surely be effectively worthless now after the company announced today a clear plan for a 19:1 dilution in 2024 – if they can survive that long. This also requires them being able to secure funding now without full FCA approval.

The ambulance chasers have won, having closed the doorstep lending arms of Provident, NSF and now MCL.

A visible, legal, regulated credit market (“doorstep loans”) making loans to people otherwise excluded from credit is effectively shut. It was definitely the grubby end of the credit market – but the same people who took these loans will now get loans from unregulated sharks, unregulated new financial products or not be able to get any credit at all and individual financial responsibility takes another knock.

Is that what the white collar, comfortably-employed FCA (and the government regulators behind them) are there to achieve? The claims company lawyers will move on to the next car crash but the our financial and broader economic system has lost again – without the truly vulnerable getting help.

They need higher wages and better mental health / addiction support services and/or better financial products. Removing access to credit won’t help these problems but it will send more poorly paid care home staff to foodbanks or to work in Tesco when their washing machine packs up.

But loans still need to be available to people without credit. Loan shares are a big problem and loan providers like Morses Club were at least trying to improve this.