Hackney churches and community groups take on pay day lenders
- Credit: Archant
A pioneering church hopes to put pay day lenders in the borough out of business by offering its own loans to struggling residents.
St Thomas Clapton Church, in Clapton Terrace, Clapton, has become one of the first in the country to set up a pop-up credit union to offer loans at interest rates far cheaper than banks and the sky-high charges which can be applied by pay day loan companies.
The initiative – which has been created in partnership with the London Community Credit Union in Mare Street, Hackney Central – was announced this week.
Meanwhile, community group Hackney Citizens has begun lobbying the council to ban pay day loan companies advertising in the borough.
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Rev William Taylor, who is spearheading the initiative, said: “We are doing it because there’s a need for Hackney residents to take control of their finances.
“I’ve been involved in finance issues for a while. Rather than shaking our fists at bankers and the city, I wanted to make sure the interests of the community were being met.
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“I have parishioners who have terrible financial problems around debt. I wanted to know what we could practically do to help them.
“There is not a credit union locally. The nearest one is in Mare Street and people need somewhere local to make their deposits and access their accounts.
“We are working with the local estates to raise awareness of this alternative model of finance. We have a reach through our network which other banks don’t have.”
He continued: “We’ve run training for volunteers so that we will be able to resource and run the pop-up credit union ourselves and work with other churches to do so.
“I’m pleased there’s been interest but it’s a matter of taking a long road and going into the community and making contacts. I don’t think people are immediately going to get it.”
Meanwhile, Rev Graham Hunter, of St John’s Church in Pitfield Street, Hoxton, will be part of the contingency presenting deputy mayor Sophie Linden with a petition of 750 signatures tomorrow (Friday) against pay day loan companies advertising in the borough.
It is the minimum amount needed to raise the issue at a full council meeting.
He said: “There’s enormous pressure for people to provide the glitzy commercial Christmas of advertisers’ dreams. Many people in low-paid jobs can’t afford the costs.
“Offers by pay day loan companies seem like a quick win, where they can access instant cash.
“However, the true cost of these loans is hidden in the small print. Interest on these loans can be in excess of 2,000 per cent and people then end up running up a massive amount in loans.
“We are really concerned about it as the number of people affected is quite high.”
n People can sign up to the new credit union on Wednesday afternoons between 1pm and 5pm.