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[00:01.66]So why do people scraping by on just ￡5.90 a day pay such horrendous interest on loans?
[00:09.31]These, surely, are loans you'd be mad not to default on.
[00:13.89]Here in Glasgow, defaulting on your loan is highly inadvisable
[00:20.06]You won't literally lose a pound of flesh
[00:23.07]but grievous bodily harm isn't an unknown consequence of letting down the loan shark.
[00:31.01]Quite simply, individual loan sharks have to be rapacious and ruthless
[00:36.11]because the costs to them of even a single defaulter are so high
[00:43.80]And that explains why, from Renaissance Italy to modern Scotland, the moneylender is so often a hated figure
[00:52.00]He's providing a service, but at a socially unacceptable price.
[01:00.00]So how did lenders learn to overcome this fundamental problem?
[01:04.20]If they were too generous, they didn't make any money.
[01:06.90]But if they were too hard-nosed, borrowers would eventually default
[01:11.23]The answer was to get bigger and more powerful
[01:15.02]It was time to invent banks
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