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East Sussex Credit Union ‘has saved its members £600,000’
A credit union competing against payday loan firms believes it has helped save its members £600,000 in interest in the past year.
For the first time in its history, East Sussex Credit Union lent people more than £1 million in the 2012/13 financial year.
With more and more people spiralling into debt, some see it as hope that people are turning to the ethical lender as an alternative to high street and payday lenders, such as Wonga, who have eye-watering interest rates.
Those running the not-for-profit group said they were pleased with the progress but warned that it had to do more to support those struggling with their finances.
Richard Priestman, president of the credit union, said: “Overall we believe we have saved our members at least £600,000 in interest by dealing with us rather than the other more expensive high street and doorstep lenders.
“We also made progress in reducing our dependence on grants, with 75% of our income being generated by our own resources.
“Nevertheless the economy and our members are still facing difficult times and we are seeing very high levels of demand from those of our members that need us the most.
“Changes in Government policy on expenditure cuts, housing benefit and universal credit are causing many of our members greater hardship and we must grow our balance sheet in order for us to provide more help and make us more self-sustainable.”
The loans and savings organisation was set up in 2001 to serve east Brighton.
In 2004 it expanded to include the whole of Brighton and Hove and now it has more than 5,000 members.
Among them is Brighton Pavilion MP Caroline Lucas, who said: “High street banks often do not meet the needs of low-income consumers for affordable, small sum credit, which means that millions of people end up paying far too much for loans.”
In the last year, accounts show it loaned £1.05 million – an increase from £734,000 in 2011/12.
The news comes as the Bank of England said credit unions across the country had broken through the one million members mark.
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