A REVOLUTIONARY money lending scheme has been launched in a bid to tackle East Lancashire's debt problem and thwart loan sharks who prey on vulnerable families.
East Lancashire Moneyline offers loans from £50 to £10,000 to people who have been turned away by banks and building societies.
Instead of being forced to go to money-lending companies or back street sharks -- some of which can charge high per cent in interest rates -- the scheme, backed by Blackburn with Darwen Council, will offer loans at the same rates as banks.
The scheme, based in Lord Square, Blackburn, is the first of its kind in Lancashire and only the third in the country.
Although initially available to residents in just Blackburn with Darwen, manager Ian Clough said the aim was to include people from Burnley, Accrington and the rest of East Lancashire.
Labour MPs, the Samaritans and the Citizens' Advice Bureau welcomed the scheme, saying it experienced many clients who had financial difficulties. But Ribble Valley Tory MP Nigel Evans said he feared council tax payers money could be used to cover people's bad debts.
The area has some of the most deprived estates in the country. Last year Blackburn with Darwen, Hyndburn, Burnley and Pendle councils were among 83 local authorities chosen to put forward schemes to tackle poverty and decay, and get a slice of the government's £800million Neighbourhood Renewal Scheme.
A survey also revealed the Bastwell area of central Blackburn to be one of the 10 poorest areas in the country, with more than 60 per cent of homes there with an income of less than £10,000.
A separate survey by debt management company Chiltern claimed one third of all people living in Lancashire were in debt and at least two months behind with their repayments.
Figures produced by business information group Experian found that one in ten adults in Blackburn and Burnley have County Court Judgements against them, compared with only one in 24 people in the Ribble Valley.
Julie O'Brien, of the Blackburn CAB, said some companies charged "extortionate" interest rates.
Coun Jim Blackburn, who represents Shadsworth, said he hoped it would mean an end to people signing up to door-to-door credit firms. He said: "These firms will ply for clients door to door and then hit people with huge interest repayments which they just cannot begin to make. Many of them are desperate."
The Samaritans in Blackburn receive many calls from people who experience financial difficulties. A spokesman said: "It sounds like an excellent idea, and we applaud any kind of scheme that offers loans for a cheaper rate, but getting into any kind of kind debt is still a source of worry."
Coun Maureen Bateson, whose council department is responsible for the new scheme and also issues annual advice on debt, said: "It is an area which causes a great deal of difficulty and stress for many people."
Moneyline is an independent limited company backed by the council, Barclays Bank, Twin Valley Homes, which owns former council houses, and North British Housing.
Applications will be considered based on current circumstances rather than previous credit history. Mr Clough said the main criteria was the ability to pay. Borrowers must have a fixed address and show some proof of income -- whether wage, salary or benefits.
Blackburn MP Jack Straw said: "There are some people who come to my constituency surgeries who have got into financial difficulties, resorted to loan sharks and ended up with much worse problems. "Burnley MP Peter Pike backed the scheme saying: "I am a strong supporter of credit unions and similar bodies. This scheme has my full backing and I hope it is extended throughout East Lancashire.
"There are people who can't get access to money and they are often the people who end up paying the most to borrow."f+zBut Ribble Valley Tory MP Nigel Evans expressed concern saying: "The council must be very cautious. It must not end up using council taxpayers money to guarantee bad debts otherwise it could cost a huge amount from the public purse."
f-zf+z, in Blackburn Shopping Centref-z. Details on 01254 696203.
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