Just because it is cheaper than Wonga is not a good reason for the council to promote payday loans. (“New pioneering Sheffield cash lender aims to break city debt cycle” – Star, August 10, 2015).
It might seem like a good idea for “Sheffield Money” to offer a slightly cheaper alternative but an APR of 89 per cent does not help people on low incomes.
It just gives official backing to high-interest, short-term loans instead of helping people take back control of their finances.
The council would be better to invest in local advice services and credit unions to help people out of debt, instead of encouraging people to stay in debt with high-interest loans.
The DWP’s Budgeting Loan scheme provided zero-interest loans for many people in need.
Sadly, this was abolished in April 2013 and the responsibility for “local welfare assistance” was passed to councils.
This too is now under threat. Wonga-lite is no substitute.
Sheffield Green Party has consistently called for more funding for front-line advice services, which are now under huge pressure because of cuts in other public services.
Sheffield Green Party