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Credit unions in East Lancashire boom over debt fears
NEGATIVE publicity surrounding the perils of payday lenders with sky-high interest rates has led to a boom for credit unions.
As reported in the Lancashire Telegraph earlier this month, Blackburn with Darwen Council has blocked access to payday loan firms from public computers in all its facilities.
It came after the Archbishop of Canterbury Justin Welby launched a scathing attack on firms offering short-term loans with interest rates often over 1,000 per cent APR.
The use of such loan companies can lead to individuals finding themselves struggling to pay back debts. But there is an answer, according to the boss of one credit union.
Janice Parker runs Jubilee Tower Credit Union, based in Darwen but also offering services to people in Blackburn.
She said: “We had one man who was borrowing £800 a month and repaying £1,100. We were able to give him a structured loan and set up a savings account on the side.”
Mrs Parker said in the past 12 months, there had been a 15 per cent increase in members of the union.
She said: “The demand for our services is increasing all the time, especially after Justin Welby’s comments.
“The level of awareness of what credit unions do has increased.
“We have now got just under 2,000 members and are holding £750,000 in savings. We have £350,000 out in loans and we tend to lend out £250,000 per year. Through using us instead of other forms of credit, customers saved £130,000 between April 2011 and March 2012, and that can only have increased.”
Mrs Parker said there had also been a large increase in the number of people making small withdrawals from their savings at the end of the month.
Pennine Community Credit Union serves Burnley, Nelson and Colne, and has branches in the town centre of each.
Manager Kathryn Fogg said there had been a surge in numbers there, too.
She said: “We have about 4,500 adult members and 500 juniors, with 500 of those signing up in the last six months. We have been very busy over the last year and definitely over the last few weeks.
“People seem to be moving their money into the union and a lot of people want help sorting out the mess payday loans get them into.”
Blackburn with Darwen Council executive member for resources Andy Kay said: “Times are extremely tough for families out there and we are hearing about people every day getting into difficulty with their finances.
“Credit unions are ethical lenders and operate not for profit.”
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