High street payday lender The Money Shop could be about to close 200 stores, putting the jobs of 350 staff at risk.
The lender currently has 500 stores and employs a total of around 3,000 people. It has rapidly grown since first opening 168 stores in 2006.
However, payday lenders have been stung by new regulation from the Financial Conduct Authority (FCA), limiting loan interest rates to 0.8 per cent per day on the amount borrowed.
The Money Shop has already had to close 40 of its stores, while letters have already been sent out to employees informing them of a consultation process taking place to close as many as 200 stores. Dollar Financial, its parent company, hopes to keep redundancies to a minimum by finding new roles for staff.
The FCA regulation, which came into effect last week rules that borrowers will not need to pay back more than double the amount borrowed, while one-off default penalties will be capped at £15.
A Dollar Financial statement said:
Regrettably, it is possible that some 350 redundancies may be necessary as the company evolves its business to serve customers in a fair and sustainable way following the introduction of the new regulations on consumer lending, as well as removing duplication of facilities inherited through previous acquisitions.We fully acknowledge the impact these proposals may have on our people both personally and professionally and we will support affected employees through this process and into future employment.