Credit unions sign up for scheme to take on payday lenders

 

Personal Finance Editor

Some 31 credit unions have signed up to a £35.6m government scheme that they hope will help them take on payday lenders and banks by offering essential financial services at a fairer price.

The Credit Union Expansion Project was launched last month with the aim of encouraging a million more people to use the mutuals, which are usually based in local communities or workplaces.

The rapid take-up of the scheme backs up the importance of credit unions, said Mark Lyonette, chief executive of the Association of British Credit Unions, which is managing the project.

This is a landmark project for credit unions and a once-in-a-lifetime opportunity which will help to place the credit union movement in Britain on a similar footing to leading credit union movements around the world," he said.

Under the five year scheme, local unions will be encouraged to pool knowledge and resources.

Vincent Thomas, Chair of London Plus Credit Union, said: "The project will help us to reduce costs and expand our product range."

Several local unions - such as in Wales, Newcastle, and north London - are already working with local councils and debt charities to battle the payday lenders on their doorstep.

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