As part of their telecoms licensing agreement with the government, operators in India have to provide a level of service in rural areas that amounts to ten per cent of their total installed capacity explains AcrossWorld's Dey. This was triggered mainly by the fact that the financial burden of providing payday loans and rural access meant that operators were reluctant to rollout cash advance services and infrastructure in those areas.

The credit union payday loans of today dates back to Germany in the mid-1800s when farmers found themselves bankrupt by famine. They had no livestock or seed to plant crops, and banks would not loan them money. These desperate farmers had nowhere else to turn but to so-called money lenders, who took advantage of their clients by charging exorbitant interest. Unable to pay the loans, the farmers lost everything.

If operators fail to meet their ten per cent interest on all payday loans, the rural obligation they face penalties imposed by the government. Critics of this method have claimed that the trouble and expense of providing payday loans in the rural communications actually makes the penalty a preferable option for cash advance operators. In response, one Indian government official insisted that these payday loans penalties were not 'one-off' and did not automatically 'absolve operators from their obligations'.

A financial analyst covering the payday loan industry reports that the average user takes out 11 loans per year.(7) In Wisconsin, one consumer borrowed more than $1,200 from all five payday lenders in her town and was paying $200 every two weeks to cover the fees without paying down the principal.(8) Numerous other press accounts detail the experiences of consumers with similar stories. In Texas, one borrower had multiple loans from more than one lender, making payments on at least eight loans for five months.(9) In Indiana, a recent examination of a sample of licensed payday lenders found that, on average, borrowers made more than 10 loans each, with one borrower having made 66 such loans in a year.(10) A recent analysis of data from Illinois found that only a small portion of payday loan borrowers were "occasional" borrowers. Eighteen percent of borrowers had three or fewer such loans, but the average borrower had 12.6. More than half, 52 percent, had more than 10 and more than one-third had more than 15. Twenty-one percent had more than 20 loans.(11) These facts demonstrate that payday loans become a trap for desperate consumers, rather than a one-time or occasional transaction.