Not always true, some folks misuse them for a variety of reasons.
Take the option away in the UK and a friend’s boyfriend wouldn’t have been able to use an app to take out a bunch of short term loans in her name for Xbox games…
So I think sometimes these facilities are used frivolously. You’re right that a portion of users in real hardship would turn to “informal” lending if these lenders were to disappear. But it feels like we as a society should come up with a better solution there really.
There's already a solution there, she could take him to court to recover the money. Your argument is basically "ban X because X can be used in an illegal way".
Further to that, my argument is that for people who are in such severe need that they would then turn to loan sharks, there is probably a better solution out there that we as a society should be looking into, than usurious payday lenders.
At no point was my argument anything close to “ban X because X can be used in an illegal way"
People desperate enough to use payday lenders have no other options. And the high interest rates reflect the risk.
Take that option away and the need doesn’t magically disappear, they just go to black market lenders where there really is no backstop at all.
Far better to regulate.