A better comparison would be to compare that royalty rate with what the author gets from sales. A 'typical' rate would be 10% of what the publisher gets. If the retailer sells the book for £8 they'll keep something like 40% so the publisher will keep £4.80 and the author will get £0.48.
Not to mention that a single book can be loaned multiple times over the year. So, if you have a pay per loan rate of £0.0629, it would only have be loaned 8 times over the year to match the rate of one sale (for the author). Not to mention that they probably get the royalty from the first sale as well (or maybe not as part of the pay per loan agreement - I have no idea).
So, the pay per loan rate is probably pretty good.
There was a discussion in France, where the did not used to have a pay per loan system in the libraries and some people wanted to introduce one. I do not know however, what came out of it..
The Rate Per Loan has now been confirmed and has increased for the first time in three years to 6.29 pence
£0.0629 is somewhat different to the £7.99 that the average paperback costs in the UK these days.
Also:
Over 23,000 writers ... receive PLR payments each year
Which seems a very small number to me.