@emsz – that’s the conundrum here. These small loans are very risky and very hard to make money from but if you legislate Wonga out of business these people will just turn to genuine loan sharks. The Church can step in to setup and administer credit unions but it doesn’t change the risk profile and the loans almost become charity.

BTW you can definitely get a credit card, get one with a low limit balance and make sure you pay it off. That will build your credit history.

@ninfan I suspect they weren’t making that much money net of expenses even paying you that low interest rate. I have looked quite closely at the economics of these sorts of businesses and micro-finance and it’s very tough to make it work.

people who borrow more than they can afford to pay back

I think there is a correlation between people who need to borrow money at short notice and people who are not good at making decisions, but on a previous thread that led to me being called a Nazi, so I will not discuss further 🙂