Payday loan shop seeks to open in Tower Bridge Road

Instant Cash Loans Ltd, which has 407 stores under 'The Money Shop' brand, has submitted a planning application to Southwark Council for the change of use of the former amusement arcade at 82 Tower Bridge Road.

The chain says that across the country 5,000 new customers a month register for its 'cash till payday' product. The shops also offer cheque-cashing, money transfer and foreign currency exchange.

In its application to the council, The Money Shop says that it expects the Tower Bridge Road store to generate an average of 100 transactions a day, with up to 250 expected on Fridays. The company says that on the last Friday of the month it could attract more than 300 customers.

The Money Shop was mentioned in the House of Commons last week by Thurrock Conservative MP Jackie Doyle-Price. She told MPs that the chain "offers a payday loan at £9.99 per £100, which sounds reasonable, and it can be if people can pay it back within a month; if they cannot, they have no choice but to take out a fresh loan.

"Some customers find themselves taking out a fresh loan every month and end up paying APRs of as much as 260 per cent."

Last month Labour politicians from Southwark and Lambeth launched a joint campaign to stop the proliferation of payday loan shops.

"Labour believes lending of this kind is both socially and financially irresponsible and a scourge on our communities," said Cllr Peter John, leader of Southwark Council.

"There are far too many of these businesses on Southwark streets. We want to see alternative low cost loans to be made available to our residents."

But London Assembly member Val Shawcross warned that alternatives are scarce: "Many people on lower and middle incomes are not catered for by high street banks," she said.

"They have no choice but to borrow at extreme rates. As a result, those most in need often pay the highest rates to obtain credit."

London Mutual Credit Union, which operates across Southwark and Lambeth and has a local branch in Pilgrimage Street, is planning to launch a new low-interest loan service in the new year to provide an alternative to the high street lenders.