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Hollywood actor Michael Sheen backs Scottish fair loans scheme as concern at debt grows

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22 Jan 18

The campaign launch coincided with a new £1 million affordable loan fund established by Carnegie Trust UK which will support social lenders such as credit unions and CDFIs to expand their not-for-profit lending activities to the excluded and financially vulnerable.  The Carnegie UK said it is estimated that around 150,000 people in Scotland borrow £250m from high cost lenders like pay day loan firms, door step lenders and rent-to-own shops annually.

The launch comes in the same week as the Royal Society of Arts published a new report highlighting the sheer extent of financial worries and problem debt.  As many as 70% of workers are “chronically broke” with almost a third having less than £500 in savings and 30% concerned about their levels of debt. 

Michael Sheen said: “High cost credit has for too long been targeted at those who can least afford it and those who are most vulnerable in our society. The need for ethical alternative providers is clear, whether they be on our local high streets or available online.

“But it’s not just about creating more providers – we need to do more to enable them to compete with the high cost providers and to provide vital financial support to communities across the UK, putting people before profit.”

Commenting, ABCUL’s Head of Policy & Communications, Matt Bland, said: “Credit unions the length and breadth of Great Britain are supporting the most vulnerable and excluded communities by providing a fair and affordable way to borrow.  And by using the Save As You Borrow method not only are they providing a cheaper alternative, they are helping people begin to save at the same time as they borrow – often for the first time in their lives – reducing their need to borrow in future.

“The RSA report shows how the need for affordable credit and assistance in developing a savings habit is by no means restricted to the poorest and most vulnerable in our society.  And credit unions pride themselves on providing a service that meets the needs of their whole community – from the most vulnerable and excluded to those in low- and middle-income employment.  As work becomes ever more precarious and inflation drives down the real value of wages, workplace credit unions can be the only thing preventing a financial shock becoming a downward debt spiral.”

The launch of the new fund was accompanied by the release of a new short film, Speaking Out for Fair Credit, featuring Michael Sheen, and testimony from customers who have been helped by some of the UK’s affordable lenders – including 1st Alliance (Ayrshire) Credit Union. The video highlights the impact not-for-profit lenders can have in borrowers’ lives and asks that government, the business community and civil society support this sector, which is providing a vital service to people who are financially excluded.

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