The Money Shop to shed 200 stores and 350 jobs

Money Shop has struggled since the payday loans (Getty) were capped

Money Shop could be forced to close about 200 stores in the UK due to its business model wins after bedding down the new regulations to protect consumers of escalating debt payday payment.

The payday lender is currently in a consultation process, according to the BBC. The result of this could see 200 of its 500 stores are closing. Already closed 40 stores.

This could mean about 350 of its 3,000 employees lost their jobs, although Money Shop told the BBC that will try to keep redundancies to a minimum by finding new roles for employees facing redundancy.

He added that the reorganization of the company could see one of the three main offices are closed.

The American company that owns The Money Shop Dollar Financial, said in a statement: "Unfortunately, it is possible that some 350 layoffs may be necessary as the company evolves its business to serve customers in a fair and sustainable manner after introduction of new regulations on consumer credit and the elimination of duplication of facilities inherited through previous acquisitions.

"We fully recognize the impact these proposals may have on our people, both personally and professionally, and we will support employees affected by this process and future employment."

Financial problems The Money Shop come after the Financial Conduct Authority (FCA) capped interest rates of payday loans at 0.8% per day of the amount borrowed. In case of default by customers, the payday lender can only charge a fixed fee of £ 15, while the total cost limit of 100% is meant to protect borrowers from mounting debts.