New funding plan to help people avoid payday loan companies
16th August 2013
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New funding plan to help people avoid payday loan companies

14 August 2013

We're to make safe and affordable instant access loans available by providing £300,000 additional funding to local Credit Unions.

Credit Unions are playing an increasingly important role in supporting people struggling with debt and low incomes by providing access to affordable credit and by encouraging saving.

Funding for the project − one of the schemes highlighted in our pledge to tackle poverty − was approved by Cabinet on July 30.

Detailed proposals are to be considered at our Health and Communities meeting on Tuesday (August 20).

Our Cabinet Member for Health and Communities Councillor Dave Allen said:

"When people are struggling to make ends meet and put food on the table for their family any offer of money to get them through the week can be tempting.

"But these quick financial fixes come at an extremely high cost and it is sadly financially vulnerable people who can afford it the least who are preyed on the most.

"We want to help people struggling with debt and those on low incomes to get back on their feet and this system avoids the need for them to use extortionate doorstep lenders, illegal money lenders or payday loan companies offering short-term high-cost credit.

"Derbyshire's Credit Unions do an invaluable job and we're committed to supporting them. We believe that providing additional funding to support their work will have a positive knock-on effect in local communities."

The system has already been successfully piloted in Chesterfield and North East Derbyshire with Credit Unions offering people access to instant loans of up to £500 with repayments secured by direct deduction from benefit payments to ensure a low default rate.

Our report to be considered next week proposes that the five Credit Unions covering Derbyshire will be invited to apply for an allocation of funding from the £300,000 instant access loan fund.

Credit unions are not-for-profit financial cooperatives which are owned and controlled by members. Savings are covered in the same way as banks and building societies so money is always protected. They are run by local people and offer savings accounts and loans at lower costs than many high street lenders and credit companies.

Derbyshire Credit Unions

Manchester Credit Union

Offices in High Peak are based in Gamesley, Glossop and Fairfield, and Buxton.

0161 231 5222 

Chesterfield and North East Derbyshire Credit Union

01246 278833

2 Shires Credit Union - Bolsover

01909 500575

Erewash Credit Union − Amber Valley and Erewash

0115 932 9493

Money Spider Credit Union − South Derbyshire

07950 391218

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Sarah A

Member since: 10th July 2012

Hi, I'm Sarah. I've lived in Heanor with my family for over 10 years and I'm passionate about our beautiful little corner of this historical county. If you know of something that's great about our area,...

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