New hope for people in shadow of loan sharks (From Worcester News)

New hope for people in shadow of loan sharks

5:40pm Tuesday 18th September 2012 in News By Tom Edwards

A REPLACEMENT to Worcester’s old credit union could be on the way.

Worcestershire County Council has announced talks are under way about a new lender aimed at helping desperate people who are seeking cash before pay day.

The city’s old credit union was wound down in April last year after bosses revealed its members had been running away without paying their money back. The organisation, which survived on grants, was the city’s only body of its type and the loss hit many people hard.

Labour councillor Alan Amos, who represents Warndon, raised the issue during a meeting of full council.

He said the demise of the old organisation had created a “rapidly growing need for people on low incomes to obtain short-term financial help” but said he was worried too many residents turned to loan sharks.

He said: “What work is the county council doing to assist people in deprived areas with money management problems?” He was backed by Coun Simon Geraghty, cabinet member for the economy, who said a new-style union was in the pipeline.

A panel has been set up to examine the services available for people on low incomes from grant-funded organisations in other areas of the county. That is expected to lead to a new credit union setting up in the city.

“There is a range of support and services available to help people on low incomes,” said Coun Geraghty. “A financial inclusion task group is looking at sharing a credit union with others in the county.”

Worcester’s old credit union was aimed at residents seeking small loans for everyday items. But bosses revealed members had taken money without returning it, and that problem, as well as a drying up of government grants, had led to its demise.