WITH their polished adverts, same-day bank transfers and the promise of a quick escape from debt, it is easy to see why pay-day loan companies are flourishing in towns like Bolton.
But campaigners are fighting back, and highlighting credit unions as a safer, more affordable way of borrowing and saving.
The Church of England announced last summer its plans to force money lenders Wonga out of business.
Last week they launched a scheme to train vicars to offer financial advice and use churches as a base for credit unions.
The strength of feeling against pay-day lenders forced Bolton Wanderers to abandon their sponsorship deal with payday company QuickQuid.
And in December Bolton Council announced plans to open a white goods shop in the town centre to stop people turning to pay-day loans.
Hoot is Bolton’s dedicated credit union — a financial co-operative owned and controlled by its members, meaning any profits go back into the pot, and stay in the town.
A £500 loan with Hoot means an interest rate of 26.8 per cent, compared with 272 per cent from Provident — or more than 1,000 per cent from QuickQuid.
Chris Canham, assistant manager of Hoot, said: “Obviously we get a lot of people who are using pay-day lenders, and we’re able to consolidate some of that debt at a more reasonable rate.
“Our main criteria is are people are able to afford the loan, and repay it — it’s about lending responsibly.
“We do check people’s financial situation and take each individual application on its own merits.”
If people struggle to keep up with payments, help is at hand.
Ms Canham added: “We always encourage people to contact us if they are struggling to make repayments, and we contact people pretty quickly if they miss payments.
“Frequently we negotiate what they pay us and make the payments less, to give people an opportunity to pay back what. But if they just won’t pay back we can take more formal steps.”
For information visit wisewithmoney.org.uk
Bishop says video will be a vital lesson
THE Right Reverend Chris Edmondson, Bishop of Bolton, and financial adviser-turned-actress Nadia Balfe answered questions when they visited Hoot credit union to film a video about responsible lending.
Organised by the Diocese of Manchester, representatives from the Church of England spent the day visiting credit unions across the region on board a dedicated bus and chatting to users of the co-operative banks.
The short film, which will be produced in time for International Credit Union Day in October, aims to show the organisations can be used from people from all walks of life.
Rev Edmondson, who is a member of Hoot, said he hoped the video would spread the word of credit unions.
The Church of England has opposed pay-day loan companies and announced plans to set up a ‘champions union’, that will see religious leaders offer money advice.
Rev Edmondson said: “I hope the video will encourage even more people to look into their local credit unions as an effective way of borrowing and lending.
"For decades churches have been serving their communities through their volunteers.
“By linking credit unions and churches, it is a very particular way of meeting a growing need and making a positive difference to people’s lives.”