Usury : causes and impact on wellbeing

Abstract

As neo-liberalism became the accepted way of life, profit on interest has lost its negative and unethical connotations and has become a social norm. Usury however is considered an economic crime since the lender is not an authorised financial institution and is charging in excess of the interest rate restrictions of 8% established under Maltese Civil and Criminal Law. Despite its criminalisation, usury remains a widespread though hidden phenomenon within the Maltese Islands. Usury flourishes in corrupt settings driven by extortion, fear and violence. Yet, it is not considered a vital issue in terms of policy development and evidence-based practice. The research shows that there are various factors which may lead one to turn to usury, varying from structural factors to personal circumstances. Moreover, usury has a wide-ranging negative impact on all spheres of the victim’s life, financially, socially, psychologically and emotionally. Usury is indeed a vicious cycle which perpetuates itself on both the macro-community as well as on the personal level, leading to ever-increasing traps of over-indebtedness. Soundly based on qualitative research with stakeholders involved in the field, this exposition aims to raise awareness of the causes of usury and the impact that it has on both personal and social wellbeing, whilst setting forth vital policy recommendations.