A county-wide credit union has been set up to provide help for people struggling to survive the recession.
Established by Kent County Council, the Kent Savers service will provide an alternative to unscrupulous loan sharks and lenders who take advantage of desperate residents by charging exorbitant interest rates.
The union, which will be non-profit making and run by a voluntary board of directors, will be regulated by the Financial Services Authority and could open for business as early as this week.
Cabinet member for economic development Cllr Kevin Lynes said the scheme was part of the council’s ongoing Backing Kent People campaign.
He said: “In areas where perhaps money is tight, the economic prospects are not great and there are high levels of worklessness, credit unions provide alternatives to the people who turn up on your doorstep with bags of cash and fairly exorbitant interest rates.
“When we looked at these kinds of organisations, the APR (annual percentage rate) ranged from 299 per cent up to 899 per cent. There’s even an online company that charges upwards of 2,500 per cent.
“These companies all say in the small print that they should not be used for long-term loans, but if you’re desperate to buy Christmas presents or kit your children out in new school uniform then you’ll take the cash from wherever you can get it.”
Kent Savers will offer a fixed rate interest of 27 per cent, which Cllr Lynes says is in line with other credit unions already operating in Canterbury, Thanet and Medway.
It will offer loans of between £500 and £5,000 and be targeted at residents who cannot guarantee earnings or who have no equity.
It will also provide a bill payment service and flexible and secure saving plans.
Cllr Lynes said Kent Savers would benefit people from across the county, even in towns considered wealthy like Tunbridge Wells.
He said: “The Sherwood estate in my ward [in Tunbridge Wells] has high levels of unemployment, child poverty and single parents on benefits, and there are many people there who would find a credit union useful.
“But next door to it is Pembury, which is often viewed as a sleepy, middle-class village when it is really suffering from some quite challenging economic circumstances. No doubt the loan sharks have started roaming there.”
Residents will be able to access the Kent Savers service at one of the county’s seven Gateways – in Ashford, Dover, Maidstone, Tenterden, Margate, Tonbridge and Tunbridge Wells.
A new website has also been set up at www.kentcreditunion.org.
POSTED: 18/10/2009 11:00:00
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