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