US firm Dollar Financial which owns The Money Shop has reported that it may close up to 200 of its 500 locations as well as one of its three head offices.

With 3,000 staff employed by the payday lender, a total of 350 people could be affected under the moves. However, the company has said that it wants to keep job losses to a minimum by finding alternative positions for staff. The company has confirmed that 40 stores have already closed.

The cutbacks come as new reforms mean loan rates are now capped at 0.8% per day, so anyone who borrows money won’t be faced with heavy repayments, which previously meant customers could face paying back sums equal to more than twice the original loan.

In a statement, Dollar Financial said it had informed employees of the plan, which involves putting together its online and retail business.

"Regrettably, it is possible that some 350 redundancies may be necessary as the company evolves its business to serve customers in a fair and sustainable way following the introduction of the new regulations on consumer lending, as well as removing duplication of facilities inherited through previous acquisitions," it said.

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