A NEW report this week reveals an extraordinarily positive attitude to moneylenders who charge up to 188%. It also revealed an extraordinary statistic: 300,000 people in Celtic Tiger Ireland use moneylenders.

That's one in every ten people over 20 years of age living in a country that's going through an unprecedented economic boom Little wonder that subprime lenders . . . who target naive and vulnerable borrowers with high interest loans . . . are queueing up to get into the Irish market.

It is also extraordinary that moneylenders are allowed to charge 188% interest . . . the highest rate revealed in the report, which was compiled by research agencies and published by the Financial Regulator Banks get hammered for charging a couple of cents extra in fees. Advisers are tied up in red tape when they sell an investment product.

How and when they contact customers are strictly regulated.

Yet moneylenders are allowed to call to the door of extremely vulnerable borrowers who don't seem to have an ounce of financial sense and charge them 188% interest! If banks charged even a fraction of that there would be a national outcry.

OK, there is a view that money lending provides some sort of social service. That banks "exclude" some categories of people from their "right" to get into debt and moneylenders should be encouraged for fostering what the report terms "financial inclusion".

That people, no matter how little they earn or how poor their financial judgement, should be given access to as much credit as they want, no matter how extortionately high the interest rates are.

This view is completely out-dated. It might have made sense in Dickensian times before social security when families might have starved.

None of the reasons given for using moneylenders in this report are exactly lifeor-death. A third used the money for Christmas presents, weddings, school expenses and communions.

Another 30% went on goods, clothes and household items.

They are using money borrowed at sky high interest rates to pay exorbitant prices for communion dresses and sunbed sessions for sevenyear-olds. And the net result is that every year the ante is increased and they are expected to splash out evermore on paraphernalia for communions, confirmations etc.

Seventeen per cent went to pay bills or debts, although the latter were almost certainly at far lower rates of interest. And the remaining 20% went on travel, holidays, decoration and DIY.

Getting poor people further into debt so they can treat themselves to a new power-washer or a trip to Ibiza is not a social service.

The poorer you are the less you should borrow. Borrowing doesn't solve poverty - it just digs a deeper hole.

But it isn't just poor people.

Moneylenders attract all sorts who just want to spend money and don't care how much they have to pay back.

Astonishingly, most had access to credit elsewhere and chose a moneylender for convenience . . . because they call round to collect the money in person.

They come from all walks of life. Almost two thirds are in employment and 41% own their own home.

The one thing they do have in common: they are extraordinarily naive.

Almost nine out of 10 (88%) "trust the collector to give good advice about borrowing money". Amazingly, 72% "think of the collector as a friend". They even list "value for money" as an attraction of moneylenders!

Four out of five don't compare interest rates. Most weren't even aware of how much they were paying. All they cared about was the amount they paid back per week.

Little wonder that "some customers" feel that they would not be able to keep up repayments in the future.

How many is some? The report says 7%. This an extremely high figure. If banks lured 7% of their customers into debt that they couldn't handle, they would be deservedly slaughtered.

Depressingly, one of the reasons they do trust moneylenders so much despite being charged up to 188% interest is because they have a licence from the Financial Regulator.

Almost three quarters (74%) said the fact that the moneylender is licensed positively influenced their decision to use the company.

The Regulator appears to give a further seal of approval by publishing this report, which reads a bit like a promotional brochure for the money lending industry. A section is devoted to arguing why moneylenders should be allowed to charge as much as they do.

"A high APR is not necessarily indicative of an extortionate or high-cost loanf" it states. So what's the point of insisting banks quote APRs to give the real cost of credit?

It goes on: "Weekly affordability may be a more important factor for a consumer."

Maybe so . . . for an extremely naive consumer. But should such naivety be enshrined as if it were common sense in an official report like this?

In fact, the poor moneylenders are struggling to get by and may stop their valuable social service if not allowed to charge 188%-plus collection fees (up to 11%) that are higher than what banks charge for the entire loan.

This, apparently, is a source of concern as "it may be difficult to envisage any provider offering such a service for less". Elsewhere in the report, money lenders are allowed to express concern at the "rising cost of doing business" despite apparently having carte blanche to charge enormous interest.

This is extraordinary stuff when the Regulator only a few weeks ago issued a warning about equity release companies that do provide a useful service and charge 57% for finance.

The report concludes that loans offered by moneylenders are "relatively expensive". They are indeed. First Active launched a personal loan at 6.8% this week.

Banks like it are entitled to feel a bit miffed at how they get regularly slammed for the profits they make on single-digit interest rate loans, while moneylenders charging effectively 27 times more get the soft soap treatment in a report published by the Financial Regulator!

Not surprisingly after all that, the report toes the old Central Bank line on the issue of interest rate controls.

It sees no need to cap interest rates, arguing that the "introduction of an interest rate ceiling for moneylenders may not achieve the objectives of lowering the cost of credit for consumers".

And so fees amounting to a pittance will remain strictly regulated and any banks who overcharge even a cent in this area will get hammered in the media, hauled before tribunals and subjected to national scandal.

Meanwhile, interest rates, which cost umpteen times more and have caused untold misery among Irish families (unmentioned in this report), can go through the roof.

FORGET DEPOSIT, IT'S ALL ABOUT THE EQUITY

INVESTORS with "maxed-up" SSIAs lost over 400 so far this year, after world stock markets took a nosedive.

However, they were still rewarded for sticking to their guns through all the turmoil over the past five years.

The latest figures from Bank of Ireland Life shows equity-based SSIAs are well ahead of fixed-rate deposits. At the end of March, the average BoI equity-based SSIA was worth 22,795.40 . . . 431 less than its value at the start of the year.

But that's still 2,185 more than a fixed-rate SSIA saver would have received, with variable rate deposit accounts trailing in a poor third.

Does this mean that punters will be more inclined to embrace equity investment after the drubbing they received from eircom shares?

BoI at least is recommending that its customers stay invested for further rewards.

Bernard Walsh, head of investments, Bank of Ireland Life, notes that stock markets have consistently delivered very strong returns to investors and it expects them to continue to do so.

Over at Friends First, Jim Power predicts lower returns than the racy levels achieved in recent years.

However, even a potential 8%-10% a year seems juicy compared to your average deposit account.

With inflation now running at over 5%, Money Talks advises savers to only go for accounts paying more than this. These are available from Halifax, Anglo, AIB and Bank of Ireland but apply only to savings.