Community loan project to cut pay-day borrowing in Preston
A cash pot providing affordable loans for families living in parts of Preston has been doubled, after thousands of pounds were lent in the first months of the project.
The Friends of Fishwick and St Matthew’s created a £10,000 pot to provide personal loans from £400 to £1,000, to residents in the area.
But the scheme, run by Lancashire Community Finance, has given out all the cash since last October, and the group has agreed to double the funds to £20,000.
The friends group was given £1m in lottery cash to boost community work in the area, and set up the “financial inclusion” scheme to try to discourage residents from turning to doorstep or pay-day loans.
Martyn Rawlinson, vice chairman of the group, said: “We’ve got it set up so people can access more affordable credit, rather than go to more expensive high street lenders or doorstep lenders.
“There is clearly a need for access to more affordable credit from a responsible lender.
“The loans (so far) provided people with the opportunity to deal with domestic emergencies like car repairs so they could get to work, but also for more enjoyable activities like Christmas and getting married.”
Mr Rawlinson, who is also a councillor in Fishwick ward, said: “The scheme includes money management workshops that will be held in the area, and anyone who goes for a loan will see someone and they will make sure they can manage the loan and give them advice, so they are not just getting deeper into debt.
“It’s responsible credit, really. We target people who can’t get money from normal places like banks. This is much better than a high-street option.”
The project is part of the Big Local windfall.