Paisley Credit Union hits payday lenders in the wallet
A RENFREWSHIRE credit union has hit high interest payday lenders in the portfolio – to the tune of over £ 50,000.
A new report from the Paisley-based Renfrewshire Wide Credit Union says its difficult clients are saving thousands of pounds in high interest payments by choosing them over payday loan companies such as Wonga.
As of January, the Credit Union estimates that its 111 Salary Stretcher loan clients have saved £ 54,000 in interest payments just by switching to its product, instead of taking out a short-term payday loan.
The Credit Union’s report to the Renfrewshire Council, which provided £ 200,000 to the group through the Credit Union Development Fund, compared the costs of two major payday lenders with its own products and found the massive savings.
The Renfrewshire Wide Credit Union has granted £ 48,733 in Salary Stretcher loans since January, which is less than the total interest payments required to pay off the payday loans in the same period.
The credit union believes its ethical approach to credit encourages more people to turn away from payday lenders and attracts more people to its products.
Karen Graham, Director of Renfrewshire Wide Credit Union, said: “We realized our members were asking for instant access to short term credit.
“We believe in promoting the economy and affordability.
“People shouldn’t have to pay exorbitant prices to access these financial services. This is how the Salary Stretcher Loan product was born, with the help and support of the Credit Union Development Fund of the Renfrewshire Council. “
The Renfrewshire Council has supported the success of the Renfrewshire Wide Credit Union and believes it can be part of its poverty reduction strategy.
Councilor Mike Holmes, Deputy Head of Renfrewshire Council, said: “Our investment in local credit unions is part of our dual fight against payday lenders and poverty.
“I am delighted that Renfrewshire Wide Credit Union is making progress in creating and improving its services and products to help people manage their personal finances, while providing access to safe savings and fair credit.”
Renfrewshire Wide Credit Union was formed in 2006 after the merger of three small credit unions in Erskine, Renfrew and Linwood.
A credit union is a non-profit financial cooperative, whose members save together to create a pool of money from which small loans can be issued.