Legal moneylenders are charging interest rates up to 197 per cent (APR) per annum to low-income families who are unable to borrow from banks and other financial institutions.
An estimated £60 million is on loan to thousands of vulnerable families from more than 60 licensed moneylenders in the State, according to Director of Consumer Affairs, Ms Carmel Foley.
Ms Foley's office issues moneylending licences and authorises the APR (annual percentage rate) moneylenders can charge. She called on banks and credit unions to make it easier for poorer families to get loans, so they would not have to borrow from the licensed moneylenders.
The official list of licensed moneylenders is published in today's Irish Times.
Ms Foley acknowledged that she licensed moneylenders to charge rates which she considered "high". However, she said she had been working to have the interest rates reduced, and had occasionally refused a licence where she believed the applicant was seeking to offer credit at too high a cost.
"I do agree that the interest charged by moneylenders is very high and they provide very poor-value credit, but many families are left with no choice because they simply cannot get loans from the banks," she said.
Such people include those who do not have any savings or security to present to a more formal lending institution.
The annual percentage rate charged by the legal moneylenders ranges from 197 per cent (on a loan period of 20 weeks) to 18.5 per cent on a loan period of 36 weeks.
The official list of licensed moneylenders indicates that the company charging the highest APR is Jordan Estates Ltd, of 102-103 Amiens Street, Dublin, at 197 per cent on loans over 20 weeks. Yesterday the managing director of Jordan Estates, Mr Brendan Connor, said a very small percentage of its business involved loans with an APR of 197 per cent over 20 weeks. He said the bulk of the company's business - some 85 per cent - was in loans with an APR of 160 per cent over 26 weeks.
"While our licence allows us to issue loans over 20 weeks with an APR of 197 per cent, only a tiny part of our business is at this rate," he said. His company was providing an important service.
The list shows that some moneylenders add significantly to the return they can make from a loan by charging a collection fee for repayments. One firm charges 15.5p in the pound.
The collection fee is charged where a customer has repayments collected from his or her home instead of paying it directly into the moneylender's office. "I will do my best to keep charges down," Ms Foley said. But she added that she was worried about driving low-income families into the hands of illegal moneylenders, or loan sharks, who operated outside the law.