Commerce and Consumer Affairs Minister Kris Faafoi has suggested charities can take the place of exploitative payday lenders.
Mr Faafoi is exploring whether or not to put caps in interest rates and fees charged by lenders to prevent vulnerable consumers from being taken advantage of. He told Newshub Nation at the moment he's looking at a 100 percent cap.
"If you look at the options, what runs through all those options is to make sure that you can cap the amount of interest and the fees at 100 percent of the principle of the loan," he said.
"So in plain English, if you borrow $1000 then the interest that you pay can't go over $1000, and I think that will prevent a lot of the situations where we're seeing a relatively small loan spiralling out of control."
He's not sure what the impacts of putting a cap on the fees and interest rates would be, but he says the Government is getting its head around the sheer number of Kiwis borrowing money at exorbitant interest rates.
"I don't know if they would go out of business or not, but what we do know I about 150,000 Kiwis do use high-cost lenders every year," he said.
"We're still trying to get our head around how many of those would fall into serious trouble, but certainly when we're visiting the likes of budget advisory services, Citizens Advice Bureaus around the country, it's a constant theme."
Some charities have been helping people out of their loans, lending people money to pay off the high-interest loans at zero interest.
Mr Faafoi told Newshub Nation wants to ensure there are safe places for people to borrow if they need to, and encourage more education around financial literacy.
He thinks the Government's role in all of this could be coordinating people to head to the right charity.
"I think the Government has to make sure that they have a part in making sure that those available and there is enough interest to make sure that the Government can help coordinate that our help what's already there," he said.
"[Charities] are quite happy to do that and I think there's more possibility for that kind of action in that space.
"I think what it needs is a bit more coordination because at the moment I think you've got pots of people assisting in those situations, but not necessarily a level of coordination which I think could be needed and that's where I think the Government can step in."