The opening of a new ethical financial services provider in Skegness has been welcomed as an alternative to the ‘crippling’ effects of loan sharks and payday companies.
Lincolnshire Credit Union will be operating from The Storehouse on North Parade every Wednesday from 10am to 2pm, offering low interest loans to customers in times of need,
Development officer Trevor Larder and his team of volunteers will also help people with financial management troubles start their own accounts and offer competitive saving plans to ethically minded investors.
Mr Larder said: “We are a cooperative in the truest sense of the word, we operate purely for the benefit of our community.”
With benefit cuts and monthly rather than fortnightly universal credit payments taking effect from April, business development manager Linda Burden believes many people may fall on hard times but could find respite with the credit union.
She said: “Benefit changes will cause a terrific amount of difficulty for some people, many of whom have never had to budget over a month, so we have start accounts to help.
“We work very closely with a whole range of different organisations to look at the overall picture not just one element of the problem.”
Ms Burden hopes Skegness residents will use the credit union’s services as a safer and more affordable alternative to loan sharks, which are known to be operating in the town.
“Loan sharks are completely illegal and if you have one in your community, you usually find other forms of crime as well,” she said.
The Mayor of Skegness Coun Mark Anderson has been pushing for a credit union in the town for a number of years after witnessing first hand the problems caused by loan sharks during his time with New Linx Housing Trust.
He said: “I heard some real horror stories about people who had to flee their homes because the loan sharks were asking for money and they couldn’t afford to pay it back.
“But now we’ve got a bona fide credit union which has low interest rates for borrowers and high dividends for savers.
“It’s wonderful to finally see it arrive in Skegness and we are going to spread the message to make it a success.”
New Linx has shown its support for the credit union by offering its tenants £5 to start an account, which it believes will help them manage their finances better.
Financial inclusion officer at New Linx Housing Trust Karen Morton, said: “As a housing association we encourage our residents to use credit unions such as LincUp to save and help manage their money.
“Credit unions offer a safe, ethical and community based alternative to doorstep lenders and other costly ways to borrow.”
Coun Danny Brookes also attended the launch, which he too hopes will help low wage earners avoid the trappings of payday loan companies.
“I think it’s going to be very good for Skegness - if people come here they won’t be ripped off with interest rates, which I know has been a real struggle for many.”
One victim of high interest loans, present at today’s launch, was instantly drawn to the credit union’s ethical service, having previously suffered at the hands of more financially driven providers.
Debbie, who didn’t wish to give her surname, said she encountered money troubles after returning to part-time work after a time spent claiming disability benefits.
“I took out a high cost loan and they have charged me the same in interest as I borrowed in the first place, it’s crippling me,” she said.
“I’ve been finding it difficult to get back on my feet but something like this will really help me get back on top.”
Lincolnshire Credit Union hopes to extend its opening hours to help more people like Debbie but requires local people to sign up as members and more volunteers to help run it.
Volunteer John Nutton says he was drawn to credit unions after years working in social housing.
He said: “I’ve seen the problems that loan sharks and legal but expensive payday loan type companies can cause and the misery they bring to families so I’ve been pushing for a credit union for quite a while.”
To offer your services call past next Wednesday between 10am and 2pm or call the head office in Lincoln on 01522 528886.
For more details on services offered visit Lincolnshire Credit Union’s website.