GLASGOW residents borrow more than £57million each year from payday lenders, home credit, pawnbrokers and rent-to-own shops.
It is thought around 100,000 people in the city use "non-standard" lenders, with some charging interest rates which can work out at an annual rate of more than 20,000%.
The city council is determined to clamp down on the firms, which are used by many of the least well off.
Instead, it wants to promote credit unions which offer loans at lower rates.
In a bid to find out the facts, City Treasurer Paul Rooney, councillors Gerry Boyle and Nina Baker and independent expert Niall Alexander took evidence from a wide range of organisations and individuals.
Their report makes for shocking reading.
It points out: "A £100 loan from one firm, repaid in two equal instalments of £65, represents an annual percentage rate of interest of more than 20,000%".
Payday and non-standard lenders claim more than 80% of their customers repay on time and in full.
But the report states: "For a significant minority, borrowing represents a serious and on-going problem of income deprivation and over indebtedness impacting on the health and wellbeing of thousands of individuals, families and communities.
"There is evidence of higher use of non-standard credit in Glasgow than the UK average – in the city there are at least 55 retail payday, short- term loan advance and pawnbroker outlets."
There were also claims of misuse of Continuous Payment Authorities (CPA), which is when customers give their credit or debit card details to a short-term lender, authorising them to take payments from their account.
An undischarged bankrupt, employed 31 hours a week as a cleaner, told the inquiry she had repeatedly had to borrow £200 fortnightly.
The lender used CPA to withdraw £255 from her account when her £247 wage was paid, leaving her with no money.
She had no option but to borrow £200 every fortnight, with the added interest, to allow her to live.
The report says: "The use of CPAs, and evidence of their misuse, led to the conclusion that this is inexcusable and should be stopped.
"Evidence gathered in relation to the misuse of CPA has raised serious concerns that, while ensuring repayment to the lender, it potentially leaves borrowers trapped in a cycle of credit.
"Glasgow City Council will lobby Government to legislate against this practice for loans of less than six month's term."
The group were also concerned about the link between payday loans and betting shops.
They heard of a customer who took out three loans of £200 from one lender in one afternoon and spent the cash at the bookies next door.
The report says: "We were concerned to hear of multiple loans with different – and sometimes the same – lenders and horrified to hear of same day, frequent advances to a customer with a clear gambling addiction."
The group has drawn up 17 recommendations aimed at changing the behaviour of payday lenders.
The city council has already blocked payday lender websites from all its computers, including those in libraries,
The police and fire service in the Strathclyde area, Glasgow Housing Association, Scottish Enterprise, SPT and many charities have now followed its lead.
Mr Rooney said: "There has been some important work done at a national level to look at this market but this is the most significant research anyone has done on the extent of the impact of payday loans in one community.
"I think we all suspected the use of these loans would be relatively high in Glasgow but the figures are startling.
"Around 100,000 adults are using some form of non-standard credit.
"To put that in context, it is enough people to fill Celtic Park and Ibrox. If you don't have a payday loan, someone you know does."