A new financial scheme in Sheffield is hoping to offer an innovative alternative to payday lenders and rent-to-own stores.
Sheffield Money opens its doors today after city leaders united to find a way to provide low-cost finance.
The scheme – which has been dubbed the first of its kind in the UK – aims to deter Sheffield residents from using firms which ‘exploit’ them by offering sky high repayment rates.
The lender is backed by Sheffield City Council and the South Yorkshire Housing Association.
Rob Shearing, Sheffield Money’s chief executive, is hoping the lender can tie in with Sheffield’s vision of a ‘fairer city’.
He said: “This is completely different to any other affordable lender, as we act as a broker to match people to the best products.
“We’re here for everyone in Sheffield – from people who need a loan, need white goods, want money advice, or want to save with us.
“We’ve brought a load of providers all under one roof and we also aim to give support and advice that people often desperately need.”
Rob said that due to the price caps of firms such as the Credit Union, Sheffield Money can offer more flexibility for people who may have been refused cash in the past.
Research has said some 50,000 Sheffield residents have accessed payday lenders and rent-to-own stores.
John is one of the people in the city who has accessed loans with crippling interest rates. He hopes that Sheffield Money can help him.
He said: “I’ve had financial difficulties for many years and I can’t work due to health problems I’m on benefits.
“A lot of people think that benefit claiments live a life of luxury, but it’s really hard work.
“My children come first and I’m in a heartbreaking situation when I have to get loans for food and presents at Christmas.
“I have depression and we’ve had to go without one thing to get another thing – I’ve had to go without clothes so my daughter can get clothes.
“I’m hoping Sheffield Money can help me out.”
John’s name has been changed to protect his identity.
Julie Dore, leader of Sheffield Council, has thrown her support behind the plans.
She said: “Payday and doorstep lenders have been ripping off and exploiting people most in need of credit, preying on them and charging extortionate interest rates.
“People need a real alternative and that is why we have worked hard to create a new, ethical and affordable credit option.
“The good thing about this scheme is that it keeps money in the local economy instead of going elsewhere.”
Miranda Plowden, business development director at SYHA is also part of the team. She said: “This is outside the mainstream; our staff are not on commission and are not incentivised sell.
“We know that 80 per cent of the users that come to us will be social housing tenants so we’re really keen to invest in Sheffield Money.”
The firm is offering loans of up to £7,500 with a range of interest rates from 12.6 to 89.9 per cent APR depending on the applicant’s circumstances. People can apply for Sheffield Money products in person, online or by phone.
For more information visit www.sheffieldmoney.co.uk, call 0114 399 5555 or pop into the branch at 70 Cambridge Street.