A credit union has been launched in Preston, offering savings and affordable loans to people across the city.
Guild Money was unveiled yesterday, and is hoped to help families escape the grip of payday lenders.
We just think it is really good in these quite difficult times when people are going to pay day lenders, and there is an issue with doorstep lenders
Preston has joined forces with the Blackpool, Fylde and Wyre Credit Union, which has expanded its services to the city.
And Coun Matthew Brown, Preston Council’s executive member for social justice, inclusion and policy, said cash from the union would stay within the local economy.
The Guild Money credit union was launched yesterday at the Voluntary, Community and Faith Sector, as the first part of the rollout to people who live or work in Preston.
Coun Brown said: “We just think it is really good in these quite difficult times when people are going to pay day lenders, and there is an issue with doorstep lenders.
“So the fact people will have access to cheap loans, we think, is a good thing.
“We’ve got a huge issue, especially since the financial crisis, with big banks, in the sense a lot of people aren’t getting access to mainstream financial products so that’s leaving a huge gap in the market.
“Also there’s an issue with people working and on low income so they access payday lenders.
“Even though the government has imposed a cap, it still works out at an annual APR around 1,200 per cent and it makes a bad situation worse.
“With the credit union, the maximum we can charge is 36 per cent.”
Coun Brown described the credit union as a “good deal for the community”, and said it would allow people to save in a “secure and ethical” way.
He said: “Because it is owned by the members within the credit union, all the wealth stays within the local economy instead of going out.
“It’s like a growth movement across the country and we are really glad to be a part of it.”
Chief executive of Blackpool, Fylde and Wyre credit union, Mike Barry, said: “We are delighted to begin the extension of our Guild Money brand to more people across Preston and look forward to the time when anyone who lives or works in Preston will have access to responsible savings and affordable credit through a successful and growing Credit Union.”