Credit union offers families an escape from dodgy lenders

FAMILIES struggling to manage their finances will soon be able to borrow from a credit union rather than resorting to loan sharks.

Staffordshire Credit Union, based at the Dudson Centre in Hanley, is expected to start lending in June.

The not-for-profit organisation launched in January and is currently signing up savers.

Savings accounts are open to anyone who lives, works or studies in Staffordshire, and members can save up to £10,000, with the possibility of gaining a return on their investment in the form of a dividend.

Chief executive Kevin Waters said: "At the moment we are taking deposits so we can build up a large foundation, so eventually we can offer loans to people in Staffordshire who require financial support.

"You will save with us for 12 weeks before you can apply for a loan, because if you can't afford to save you can't afford to borrow.

"After June we will be able to offer small loans, and allow people to build up a credit history. We run as a co-operative and we want to offer help to anyone who requires it.

"We have got approaching 200 people saving with us at the moment, so things are going extremely well."

Because the credit union is supported by its members as a co-operative, it can only use money from its members' deposits to finance loans to other members.

Mr Waters said it was easy for people to fall victim to loan sharks without realising the interest they will have to pay. He said: "The money-lender will say they can pay it back at, say, £5 a week, but don't say how long it'll take to pay back. They are lulled into a false sense of security because it sounds affordable. Their recovery of debt doesn't follow rules and it's usually followed up with violence, or threats of violence.

"Women can be coerced into prostitution to get the money back. It's a horrible way to exist.

"Loan sharks are out there in Stoke-on-Trent, but there's no way to quantify how many because they're only known to borrowers. They are in the shadows preying on the vulnerable."

People who have become victims of loan sharks or know anything about their activities are encouraged to contact the Illegal Money Lending Team on 0300 555 2222. Based in Birmingham and funded by the Government, it covers a wide area including Stoke-on-Trent and Staffordshire.

For more information on the Staffordshire Credit Union call 0845 224 1215.