Changes in credit system prompt new members to sign up for help

Bradford’s District Credit Union has reported double the amount of new members for January after the district’s biggest social housing group, Incommunities, offered thousands of tenants a cash incentive to join a credit union to try to safeguard their benefit payments.

There have been fears that the introduction of controversial Universal Credit in October, a new single payment, would lead to a spike in homelessness through rent defaults among people who have difficulty managing their budgets and put them at risk of loan sharks.

Incommunities has contacted more than 4,000 of its tenants to offer them advice about the controversial changes and promote membership of the district credit union with a free £10 savings start on new accounts.

Now the credit union has announced that take-up in January is double the expected target, although it would not reveal exactly what those figures were.

Credit union chief executive Andrew Bowker said it wanted to show there was an alternative to pay-day loans, which can charge huge interest rates.

“The take-up has been working very well,” he said.

“Our current membership is around 3,800 but this January the monthly amount has doubled. We achieved our target halfway through the month.

“The fact is if you need a loan and want to save, then the choice is easy.

“You can save through normal payments with no excessive interest rates and this is an alternative to doorstep lenders.

“We are not here to make a profit, we are here to offer loans and the maximum rate we charge is 26 per cent.”

Universal Credit means claimants will receive any support for their housing costs directly on a monthly basis, rather than having benefit paid direct to their landlord.

Steve Short, director of Incommunities, Open Field, said: “Our Open Field Service offers free money-management advice to customers which covers ways of keeping to a budget, prioritising out goings such as rent and utility bills, and where to go if you are facing debt problems.”

Comments (9)

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11:06am Tue 29 Jan 13

Albion. says...

I hope it does better than some that featured on a documentary, where borrowers simply refused to repay their borrowings.
I hope it does better than some that featured on a documentary, where borrowers simply refused to repay their borrowings. Albion.

12:11pm Tue 29 Jan 13

johnhem says...

for "not being here to make a profit" 26% interest rate seems a bit high. how can you NOT make a profit at that rate, or is george osbourne running things?
for "not being here to make a profit" 26% interest rate seems a bit high. how can you NOT make a profit at that rate, or is george osbourne running things? johnhem

12:47pm Tue 29 Jan 13

Alex_Ross-Shaw says...

The 26% is annual interest, e.g. APR, which compares to 3,000% on some payday loan companies, that's why it's considered low and harder to make a profit.

It's more about offering a more affordable and responsible short term loan option to people than turning to illegal loan sharks or payday lenders etc.
The 26% is annual interest, e.g. APR, which compares to 3,000% on some payday loan companies, that's why it's considered low and harder to make a profit. It's more about offering a more affordable and responsible short term loan option to people than turning to illegal loan sharks or payday lenders etc. Alex_Ross-Shaw

1:18pm Tue 29 Jan 13

Outraged English Subject says...

The 26% annual interest from a credit union is wants so wrong about this Country. It’s understandable if borrowers simply refuse to repay their borrowings.
The 26% annual interest from a credit union is wants so wrong about this Country. It’s understandable if borrowers simply refuse to repay their borrowings. Outraged English Subject

1:54pm Tue 29 Jan 13

webess says...

Outraged English Subject wrote:
The 26% annual interest from a credit union is wants so wrong about this Country. It’s understandable if borrowers simply refuse to repay their borrowings.
Borrowing with no intention of repaying does have a legal word - it's referred to as "theft"
[quote][p][bold]Outraged English Subject[/bold] wrote: The 26% annual interest from a credit union is wants so wrong about this Country. It’s understandable if borrowers simply refuse to repay their borrowings.[/p][/quote]Borrowing with no intention of repaying does have a legal word - it's referred to as "theft" webess

2:02pm Tue 29 Jan 13

Outraged English Subject says...

webess wrote:
Outraged English Subject wrote:
The 26% annual interest from a credit union is wants so wrong about this Country. It’s understandable if borrowers simply refuse to repay their borrowings.
Borrowing with no intention of repaying does have a legal word - it's referred to as "theft"
I’m fully conscious of that, and I’ll still fully understandable if borrowers simply refused to repay their borrowings. Talk about affirming the obvious!
[quote][p][bold]webess[/bold] wrote: [quote][p][bold]Outraged English Subject[/bold] wrote: The 26% annual interest from a credit union is wants so wrong about this Country. It’s understandable if borrowers simply refuse to repay their borrowings.[/p][/quote]Borrowing with no intention of repaying does have a legal word - it's referred to as "theft"[/p][/quote]I’m fully conscious of that, and I’ll still fully understandable if borrowers simply refused to repay their borrowings. Talk about affirming the obvious! Outraged English Subject

2:09pm Tue 29 Jan 13

Outraged English Subject says...

webess wrote:
Outraged English Subject wrote:
The 26% annual interest from a credit union is wants so wrong about this Country. It’s understandable if borrowers simply refuse to repay their borrowings.
Borrowing with no intention of repaying does have a legal word - it's referred to as "theft"
I’m fully conscious of that, and I’ll still fully understand if borrowers simply refused to repay their borrowings. Talk about affirming the obvious!
[quote][p][bold]webess[/bold] wrote: [quote][p][bold]Outraged English Subject[/bold] wrote: The 26% annual interest from a credit union is wants so wrong about this Country. It’s understandable if borrowers simply refuse to repay their borrowings.[/p][/quote]Borrowing with no intention of repaying does have a legal word - it's referred to as "theft"[/p][/quote]I’m fully conscious of that, and I’ll still fully understand if borrowers simply refused to repay their borrowings. Talk about affirming the obvious! Outraged English Subject

2:30pm Tue 29 Jan 13

webess says...

Outraged English Subject wrote:
webess wrote:
Outraged English Subject wrote:
The 26% annual interest from a credit union is wants so wrong about this Country. It’s understandable if borrowers simply refuse to repay their borrowings.
Borrowing with no intention of repaying does have a legal word - it's referred to as "theft"
I’m fully conscious of that, and I’ll still fully understandable if borrowers simply refused to repay their borrowings. Talk about affirming the obvious!
Try that trick with your local friendly loan shark and find out what happens :-)
[quote][p][bold]Outraged English Subject[/bold] wrote: [quote][p][bold]webess[/bold] wrote: [quote][p][bold]Outraged English Subject[/bold] wrote: The 26% annual interest from a credit union is wants so wrong about this Country. It’s understandable if borrowers simply refuse to repay their borrowings.[/p][/quote]Borrowing with no intention of repaying does have a legal word - it's referred to as "theft"[/p][/quote]I’m fully conscious of that, and I’ll still fully understandable if borrowers simply refused to repay their borrowings. Talk about affirming the obvious![/p][/quote]Try that trick with your local friendly loan shark and find out what happens :-) webess

2:57pm Tue 29 Jan 13

Outraged English Subject says...

No need to try that, that’s a fool’s game. Besides I have a high street supermarket branded credit card at 15.9% with a 50 day interest free period. I always pay anything purchased on it off at the end of each month. If I did not the interest would eventually catch up with me and kill me! ;-) Totally see your point about the alternative loan shark, would not wish that on anybody.
No need to try that, that’s a fool’s game. Besides I have a high street supermarket branded credit card at 15.9% with a 50 day interest free period. I always pay anything purchased on it off at the end of each month. If I did not the interest would eventually catch up with me and kill me! ;-) Totally see your point about the alternative loan shark, would not wish that on anybody. Outraged English Subject

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