Where will struggling households turn to after UK clampdown on payday lenders?

There are fears that more people could turn to illegal loan sharks to make ends meet during the cost of living crisis. Photograph: Pixelfritter/Alamy

The South African-born entrepreneurs Errol Damelin and Jonty Hurwitz could not have predicted the impact they would have when they set out to disrupt the 120-year-old payday loans market in 2006.

The founders of Wonga set up the company to serve cash-strapped borrowers just as the UK was heading for economic meltdown in the 2008 financial crisis. But the now disgraced lender – which charged some vulnerable customers interest rates upwards of 5,000% – became a lightning rod for controversy before its collapse in 2018, and sparked a regulatory crackdown on the UK’s unscrupulous payday loans market.