HELP for families to access cheaper finance is being proposed in response to the report by Sheffield Fairness Commission – which has highlighted the problem of doorstep and payday lenders.
Thousands of people are believed to be using lenders which offer large sums to people with poor credit history then slap on interest rates of several thousand per cent.
Coun Mazher Iqbal, Sheffield Council cabinet member for communities, revealed he, the Reverend Peter Bradley, Dean at Sheffield Cathedral, and Sheffield Credit Union have formed a financial inclusion board.
The committee will look at ways households can be encouraged to budget better and obtain credit with less punitive interest rates.
Coun Iqbal said: “Research tells us people who borrow from payday or doorstep lenders only need the money for a couple of days.
“They are on low incomes and cannot get mainstream credit, but see adverts on emails, text messages and on television – even during advert breaks in children’s programmes.
“Doorstep lenders are even worse and some people end up with physical threats if they have difficulty repaying.”
“It is difficult to compete with payday loan companies.”
The Labour member for Darnall said: “We are trying to encourage people to use fair lenders such as Sheffield Credit Union, which charges interest at a roughly similar rate to those of high street banks.
“Information is being provided at community venues and we are planning to help the union set up a presence in outlying areas of the city so people have access.”
“The board will also be looking at how we can help people set up bank accounts and manage a budget, so they do not get into difficulties and have better credit ratings.”
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