Sheffield is not necessarily the place I’d expect to be leading the way in battling rip-off lenders who prey on hard-up and vulnerable people. But on Monday a new ethical rival to expensive doorstep and payday lenders was launched.
Known as Sheffield Money, the new lender operates from a shop and offers local residents loans of up to £7,500. But it’s a not-for-profit broker business that brings together responsible lenders as well as independent money and debt advice.
It has been set up by the Sheffield Executive Board with the support of Sheffield City Council, to the tune of £220,000, to get the business up and running. Its aim is simple: to help people escape the lure of unscrupulous lenders. The council leader, Julie Dore, said: “Payday and doorstep lenders have been exploiting people most in need of credit, especially some of the most vulnerable people in our city, preying on their need for available credit and charging extortionate interest rates.
“People need a real alternative to stop them being forced to go to these notorious lenders. That is why we have created a new, ethical and affordable credit option.”
The council reckons there are around 50,000 Sheffield residents borrowing an average of £800 from high-cost credit companies. The new service could help them collectively save up to £20m a year in outrageous interest charges.
But, crucially, it could also help hard-up people avoid falling into a desperate debt cycle, from which many struggle to get out.
Sheffield Money works with local and national companies including a Community Development Finance Institution, credit unions and white goods and bank account providers. And people don’t even need to go to the shop for financial help: they can apply online or by phone.
I know that there are desperate people across the country who could benefit from similar schemes. So I hope councils from south to north and east to west are looking at Sheffield’s initiative and planning their own.Reuse content