Project: Wheel of Misfortune – Payday Loans – Stage 1
This project involved commissioning research on the current and potential users of payday loans.
The topics covered users’ level of financial literacy, borrowing behaviour and perceptions as well as demographic factors. The research drilled into critical issues such as the purposes for which payday loans are being used and repeat borrowing. It also tracked the trend towards online access to loans.
This research will inform potential future work involving the development of educational programs on issues such as the cost of payday loans and the availability of alternative forms of credit. The findings help show what educational content and communication strategies are likely to be most effective.
Other project partners are Consumer Action Law Centre and Good Shepherd Microfinance. The research will be undertaken by Digital Finance Analytics.
Future stages may involve:
- developing additional educational content
- identifying appropriate communication channels
- consumer testing content to see if the audience finds it engaging
- delivering education content as widely as possible
The project’s first research report was published in October 2015 ‘The Stressed Finance Landscape – Data Analysis‘.