Ipswich: Borough cash boost to help credit union counter loan sharks
- Credit: Archant
A £15,000 investment will be made by the borough in the town’s credit union in a bid to create an alternative to payday loans for struggling families in Ipswich.
The boost to the Ipswich and Suffolk Credit Union’s Corporate Deposit Account will help it to increase its community lending programme.
Ipswich Borough Council leader David Ellesmere said: “This is a further step in our campaign against loan sharks, who take advantage of people’s desperation in this difficult economic climate.
“We are also aware of the incredibly high interest rates charged by some pay day loan companies and we want to help the credit union help people save and borrow.”
Three well-known pay day lenders charge annual interest rates from 1,734% to 2,949%.
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The Ipswich and Suffolk Credit Union (ISCU) was founded in 2001 and now has thousands of members across Suffolk.
It is a co-operative financial institution owned and controlled by its members and is operated with the purpose of promoting thrift, providing a safe place for savings and low cost loans.
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Opening a Corporate Deposit Account of up to £15,000 allows organisations to support the local community by depositing funds in the financial co-operative that shares social values and it has the potential for the organisation to receive a dividend payment.
The scale of the debt crisis engulfing Ipswich was laid bare earlier this year when it emerged the town’s Citizen’s Advice Bureau was working with clients who are nearly £4million in the red.
Last year specialist advisors helped 311 clients who were facing a combined £3.7m debt – a figure which has rocketed from £1.7m in 12 months.
ISCU general manager Chris Mole said: “This is a very good decision by Ipswich Borough Council as it enables the credit union to help more Ipswich people with affordable credit, while the money remains the council’s for use in the future.”
The credit union does not pay interest – but as a co-operative its members get a share of the profits at the end of the financial year.
Last year this amounted to 0.6% of their average investment.
Have you struggled after taking a payday loan? Write to Your Letters, Ipswich Star, 30 Lower Brook Street, Ipswich, IP4 1AN or email firstname.lastname@example.org