A credit union worried about a crackdown on payday loan companies has warned people desperate for cash it can’t offer a ‘quick fix’.
The Scottish Government is urging those who take out high interest, short term credit in the run-up to Christmas to consider an ‘ethical and affordable’ alternative.
It’s praising credit unions which encourage members to save as well as take out ‘competitively priced’ loans.
However, Newarthill Credit Union, which has 6,000 members, says it wants no part of the ‘12 Days of Debtmas’ campaign as the traditional message of saving and thrift could be lost.
Governments at Holyrood and Westminster have pledged action against companies who offer loans to tide people over until their wages are paid. In many cases the money is not repaid on time and interest payments rocket.
The Newarthill group, which held its agm this week, said it can provide a £1,000 loan to be repaid over a year with only £20 interest.
But president Bobby Lees stressed new members can’t expect instant cash. He said: “The Government shouldn’t be using us to combat these payday loan companies which they really should shut down.
“This is a dangerous road to go down, encouraging people to borrow money while they wait for their wages to arrive. I fear some unions could be doing that.
“We encourage people to save money and manage their own credit. It’s not a quick fix.”
Credit union manager Jackie Sweeney agreed, saying: “Is it going to help people in the long run if they go for an instant fix?
“The only way to help people with cash problems is to get them saving.”
Mr Lees said only members who have saved for a period and ‘proven their credibility’ will get a loan.