Three million people have borrowed from loan sharks in last three years

29th June 2023

New research from Ipsos and Fair4AllFinance shows that 3 million people have borrowed money from an illegal ‘loan shark’ lender over the past three years, as high-street lenders turn people worrying about rising bills and mortgage rates away while the cost of living bites.

Results from a new online survey amongst a representative quota sample of adults in UK aged 18-75 found 7% said that to the best of their knowledge, they or someone in their household has borrowed from an unlicensed or unauthorised informal money lender who charges interest (sometimes known as a loan shark).*

In a separate lived experience report, it was found that while users of illegal money lenders generally borrowed hundreds rather than thousands of pounds at a time, the total amount of debt per borrower was significant at around £3,000 on average. Repayment rates were different but invariably involved paying double. However a lack of transparency or awareness of the total cost of credit was commonly reported.

With increasing numbers of people struggling through the cost of living crisis, illegal moneylenders appear to have moved upmarket targeting lower income workers with a median customer income of £20,000 – £24,999. This group is better off than the poorest fifth of the population and may not have considered this option until recently.

Researchers found that although actual violence was rare, the pervasive threat of it along with coercive control tactics were common. There was also evidence of former collectors for now defunct home credit businesses continuing their operations without regulatory oversight, in a practice known as parallel lending.

Researchers detected a resignation to the idea of resorting to an illegal lender, as reflected by just 1% of customers in the research reporting their situation to illegal moneylending teams around the UK. Indeed, many were phlegmatic about it: ‘He’s just the money man.’

Joseph Rowntree Foundation recently reported 2.8 million low-income households having been declined lending between May 2021 and May 2023 which appears to highlight a growing credit vacuum for lower income households.

Sacha Romanovitch OBE, CEO of Fair4All Finance said “Our research suggests illegal lenders are flourishing in the credit vacuum left by the departure of high cost yet regulated lenders. The unintended consequence is that millions of people who can well afford to repay a fair loan are left with fewer safe options.”

“There is a growing consensus that structural change is needed to create a credit market that serves everyone. Fair4All Finance is convening support from across the financial services sector, regulators and cross-party policy makers to ensure that mainstream banks and lenders better serve millions of creditworthy, lower income individuals alongside accelerating the scale up of community finance provision.”

Founder and CEO of, Tobias Gruber, said “In today’s rapidly evolving financial landscape, it’s crucial to understand the risks associated with engaging with loan sharks. They may seem like a quick-fix solution if you’re unable to borrow money elsewhere, but they often lead individuals down a treacherous path of financial ruin.”

“Loan sharks exploit vulnerable individuals who urgently need financial assistance. With exorbitant interest rates and exploitative terms, they ensnare borrowers in a cycle of debt that becomes increasingly difficult to escape.”

“Credit unions are one option to help subprime borrowers access the credit they need, but many people need to be made aware of their existence. Compared to the big banks, credit unions don’t have deep pockets for advertising because they are not for profit, making it much more difficult for them to market themselves to those who could benefit from their services”.