Search

‘Ethical’ alternative to payday lending to be launched by Newham Council

09:00 19 July 2014

Polly Toynbee, Professor Anne Power from the London School of Economics, Vidhya Alakeson from the Resolution Foundation and Sir Robin Wales, Mayor of Newham

Polly Toynbee, Professor Anne Power from the London School of Economics, Vidhya Alakeson from the Resolution Foundation and Sir Robin Wales, Mayor of Newham

Baker UnlessAgreed07977074356

An “ethical” new alternative to payday lenders is being launched by Newham Council.

MoneyWorks will provide affordable credit to residents in need of financial assistance with the aim of dissuading people from seeking help from high-cost short-term credit firms.

The council envisions that the service will be a place where residents can go to get a fair deal and good advice from people they can trust and help residents to make positive financial decisions on debt and savings, build their credit rating and end their reliance on exploitative finance.

Approval for MoneyWorks was granted at a cabinet meeting last night, enabling the council to enter discussions with a range of partners including credit unions and other credit providers to provide emergency loans and grants.

The initiative, launched today alongside the London School of Economics report Facing Debt: Economic Resilience in Newham which reveals the financial challenges faced by Newham residents, will also incorporate the council’s commitment in providing emergency loans and grants to residents in crisis and people who want to make a change in their lives, through its low-interest lifechanging fund.

The Mayor and cabinet have also organised a crackdown on payday lender advertising on council property with a ban on payday lenders with APR interest rates of above 400 per cent from advertising on property fully owned by Newham Council.

Payday loan websites advertising APR rates of 400 per cent and above, and those who do not advertise an interest rate, will also be blocked to residents accessing the internet through council computers (such as those in libraries) and by staff using the internet in council workplaces. Individuals attempting to access payday lenders will instead be redirected to the council money and debt advice pages.

Researchers for the LSE report spoke to more than 100 residents living on low incomes to learn about their experiences of debt, the majority of whom felt their finances are getting worse because of competing demands and shrinking resources.

It revealed that money is a cource of shame for many, with some participants accruing debts for essential living costs and using credit cards for food - while others were so determined to stay out of debt that they put off essential repairs, cut down on hearing or stay out of debt.

Mayor of Newham, Sir Robin Wales, said: “I am not going to stand by while the poorest people pay the biggest price. The number of money lenders, pawn brokers and hire purchase stores in the borough taking advantage of vulnerable people in Newham makes me angry. Access to fairly priced credit is an important part of local people’s economic resilience. I am proud that we are committed to developing MoneyWorks, a place residents can go if they’re struggling financially or in need of affordable credit.

He added: “What is very clear from this report is that debt affects people who are in work as much as those who are solely dependent on benefits. The Newham residents interviewed are not people frittering away cash on luxuries. They are struggling with the day to day challenges of life and trying to get by as best they can. We’ll give people a fair deal, helping them change their lives and become more financially independent.”

Read more:

Terminal Five architects design first homes for private rent scheme

Students urge Newham council to ban payday loan adverts

0 comments

Comments

Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files
Comments

Please log in to leave a comment and share your views with other Newham Recorder visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by Newham Recorder staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique Newham Recorder account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

Latest News Stories

Yesterday, 21:05
Councillors have approved a £2miilion loan to Newham College of Further Education

Councillors tonight have, as expected, approved a £2million loan to Newham College of Further Education.

London
Yesterday, 12:29
Jailed... 'wheelie' biker Ahrrus Hussain for causing death of woman, 73

Uninsured motorcyclist Ahrrus Hussain killed a 73-year-old grandmother while pulling a wheelie on a busy main road.

Yesterday, 12:00
Roller derby is a fast and furious team sport

If you think roller skating is for children, think again.

Yesterday, 11:51
Police at the community action day in Green Street

Police officers are out and about across the borough today for a community action day.

Most read news

The Labour MP has resigned after posting a photo of a house draped with three Cross of St George flags on the day of the Rochester and Strood by-election.

The club said the reaction following their decision to allow Evans to train had been at an intensity they did not anticipate.

The celebrity chef is embroiled in a bitter dispute over the contract for the lease of one of his restaurants.

The Labour MP has apologised after posting a photo of a house draped with three red-and-white Cross of St George flags on the day of the Rochester and Strood by-election.

Digital Edition

Image
Read the Newham Recorder e-edition today E-edition