Mr. Bernard Sheridan:

How do people become aware of moneylenders? What the research has found and what we have seen elsewhere is that they do so through family and tradition. Why would somebody ever use a moneylender? If one's family has a tradition of doing so or one's neighbours have been borrowing from moneylenders, that partially explains the reason. One of the findings was also that people found moneylenders convenient when looking for money to purchase goods. As to whether I agree with that or why they do not borrow from credit unions, these are issues for us to consider.

We should not get carried away and conclude that everybody understands the costs associated with licensed moneylenders. While people report that they understand the costs, that is different from really understanding them. This issue is connected to the length of time people have been using moneylenders. It is not only the case that the loans are longer term but that the relationship is longer term and could involve a series of shorter-term loans, rather than everyone taking out longer term loans. We are following up on this issue.

To address the Deputy's question on recommendations, the question as to whether the cost of these loans is excessive is the biggest issue for the Central Bank. We have been up-front and taken a position on the matter, although people will take a different view. If the issue is being looked at, we will need to consider its implications, particularly in terms of the need to avoid upsetting financial inclusion and ensuring alternatives are available. While the word "recommendation" may be too strong in this regard, the Central Bank is looking at issues such as the continued use of loans and the issue of whether creditworthiness assessments are sufficiently robust to avoid circumstances in which a person cannot afford the repayments.