Maltese company offers cash-strapped Britons loans, at 2,255% APR

loans to desperate borrowers of up to £1,000, but which often result in the addition of hundreds of pounds as interest. This particular service is only available to UK residents.

The company, run by Northway Broker Ltd, makes 31-day loans with an attached fee of £29.98 for every £100 borrowed, which is to be paid in full upon the loan’s repayment.

While it appears there is nothing illegal about the business, which is licensed by the Malta Financial Services Authority (MFSA) to provide money broking services, the operation is certainly not short of criticisms.

Loans are granted for a maximum 31-day period and on the date the loan is to be repaid, the company directly debits the loan amount plus fees from the loan recipient’s bank account. A client’s first loan limit is capped at £200, after which one can borrow up to £1,000, as soon as the first loan is repaid.

Eligibility for the costly loans is simple: one must be 18 years old, reside and be employed in the UK, have your salary paid directly into your bank account, and have a minimum take-home pay of £333.50 per month.

According to the MFSA, the company was licensed in Malta in 2005 to “carry out the business of lending, specialising in short-term unsecured loans known as payday loans”. A second financial institution licence was also issued to Northway Broker Limited to carry out the business of money broking.

Both institutions are subsidiaries of Northway Financial s.a.r.l., a company based in Luxembourg, which in turn forms part of the Canadian NDG Group. The NDG Group was founded in 1995 and specialises in providing unsecured short-term loans over the Internet to US, Canadian, Irish and UK consumers. Since then, Australian consumers have also been added to the growing list – through a company called Payday Mate, which offers the same conditions as Pounds Till Payday and is also operated out of an office in Sliema.

In addition to Malta, the company has three other operating locations in Canada and one in Dublin.

The website of the Pounds Till Payday, based on the eighth floor of the Plaza Centre, states, “Since its inception in 2005, Northway Broker Ltd is increasingly holding various brands well-known in the international money lending industry. From its office in the buzzing heart of Sliema, core activities carried out are the provision of excellent customer care services to its clients and customer base in Europe and North America, as well as extensive back office duties related to the online money lending process.”

Internet consumer fora however, are rife with criticisms of the business including warnings each time the NDG Group sets up another business, while a report on the phenomenon in the British press recently likened such companies, singling out Pounds Till Payday, to loan sharks.

News Source : http://www.independent.com.mt/