Radio New Zealand - Te Reo Irirangi o Aotearoa

Church networks in a North Island city are to be tapped in an attempt to stop people falling foul of loan sharks.

The mayor of Porirua, Jenny Brash, says she and her deputy have been shocked by research being undertaken at Wellington's Victoria University into the true cost of so-called payday loans.

She says with difficult economic times looming, lower income earners can fall prey to loans with enormous interest costs. Ms Brash says 8% per week interest can equate to 400% per annum.

She says they will be trying to reach local people through church networks to warn of the risk.

They've also been talking with Labour MP list Charles Chauvel, who's promising to draft a bill if re-elected to protect borrowers from having to repay any more than the original sum they were loaned.