Payday loans linked to the poor

TAVIA GRANT
The Globe and Mail
Friday, April 20, 2007

Low-income families are twice as likely to use payday-loan borrowing even though they tend to face much higher fees and interest-rate charges, a government study showed Friday.

The report comes as the payday loan industry has mushroomed in recent years, to at least 1,200 outlets in 2004 from just a handful in the early 1990s.

Volumes of transactions are rising, but relatively few Canadians use payday loan services. Less than 3 per cent of families had taken such a loan in the past three years in 2005, Statistics Canada said. Almost half of those families had spending that outstripped their incomes.

Read the full Globe article here. See the StatsCan report here.