The practice of usury – lending money at exorbitantly high interest rates – "humiliates and kills" just like a snake by "strangling its victims," the Pope told members of an Italian association dedicated to fighting usury and loan sharking.
"It is necessary to prevent it, saving people from the illness of debt incurred for subsistence or for saving one's business," he told the delegation at the Vatican Feb. 3.
But prevention also should include teaching people to live a more frugal lifestyle, he said.
People need to be able to tell the difference between what is "superfluous" and what is absolutely necessary, he said, while learning to never take on debt for things that one could live without.
"It's important to recover the virtue of poverty and sacrifice: poverty, to avoid becoming a slave to things, and sacrifice, because one cannot receive everything in life," he said.
The Pope praised the association's work in saving more than 25,000 families in Italy from loan sharks, thereby helping them save their homes or small businesses and recover their human dignity.
At the root of every economic and financial crisis, he said, lies a worldview that puts profits, and not people, first.
"Human dignity, ethics, solidarity and the common good must be the focus of economic policies," he said.
Measures should be enacted to discourage practices that then push people to turn to unethical lenders, such as legalized gambling, which is "another scourge," the Pope said, that "grabs you and kills you."
"Usury is a grave sin; it kills life, tramples people's dignity and is a vehicle for corruption and impedes the common good," he added.
According to a 2016 Canadian Payday Loan Association report, almost 2 million Canadians use payday loans every year.
The government of Canada's Payday Loans report in 2016 found that 20 per cent of payday loans were taken out by people in household incomes exceeding $80,000 CAD. This demonstrates that payday loan use is not restriced to low-income Canadians.
The same study found that nearly half of Canadian borrowers (41 per cent) said that they rely on payday loans for necessary, recurring expensies, such as rent or utility bills. About the same percentage (45 per cent) used payday loans on unexpected necessary expenses, like car repairs.
Compared to the general population, participants were susbstantially less able to use savings to cover unexpexted expenses. Thirteen per cent of participants reported that they could cover at least six month of living expenses if they lost their main source of income. However, 37 per cent said they could not cover expenses for a month. About 17 per cent said they could not last even a week without having to borrow money.