The Bishop of Southwell & Nottingham is backing a new campaign to support an ethical saving scheme that could help prevent people spiraling into deeper debt. The 100x100 scheme launched this week, asks people to consider saving at least £100 in a local credit union*, offering loans at affordable rates and preventing people falling into the trap of extortionate loan sharks. The aim is for 100 people to save at least £100 and leave it in the credit union for at least 12 months.
The new campaign aims to produce at least £10,000 worth of savings through local credit unions which can then help fund affordable loans for anyone who needs to borrow funds.
Based on £10,000 investment, the Credit Unions would be able to get out 20 more loans of £500 – which could prove a life-line to many in the run up to Christmas. Credit union officials estimate that, based on 20 loans of £500, the extra savings would reduce the amount borrowers had to pay back under the standard interest rates by almost £7,000.
“I am a great fan of credit unions because they offer a way in to saving and borrowing at sensible interest rates for those with the lowest incomes,” said the Bishop of Southwell & Nottingham, the Rt Revd Paul Butler. “There is real concern about payday loans which charge very high interest rates, sadly legally. Then there is also real concern about loan sharks exploiting the poorest. If those of us who have more, save with the credit union, then we help them have increased capital to offer helpful loans to those who need them at reasonable interest rates.”
Coordinator of the campaign, the Revd David McCoulough said: “By saving ethically with a credit union you can have a huge impact on the interest rates that people on low incomes have to pay. This new initiative in partnership with Nottingham Credit Union and 2 Shires Credit Union aims to encourage people to consider saving in this way. Your savings can then be lent at reasonable rates saving borrowers hundreds of pounds. Your money is still your money and you help others at the same time!”
Before the scheme was officially launched some £5,400 has been pledged by staff and volunteers connected to the diocese (54 x 100) – moving the campaign well on the way to its target figure of £10.000.
The savings scheme is just part of a strong focus on ‘seeking justice’ in local communities through a whole range of projects and programmes including supporting the homeless, backing fostering and adoption recruitment; working with older people and those with mental health problems; supporting work in prisons and rural support networks for farmers and working in partnership internationally with charities like Christian Aid to tackle injustice globally through our link dioceses.