A new savings challenge in Northampton is encouraging people in Spring Borough to avoid using loan sharks.
The Northamptonshire Credit Union programme in partnership with the Illegal Money Lending Team (IMLT) and local organisations are motivating people in the town to save 10 per cent of what they earn - or as much as they can afford - to build up a savings pot for unexpected bills.
From today, the first 50 Credit Union accounts to be opened will receive a credit reward of £25 from the IMLT, if individuals can show that they save regularly for three months.
Development officer at the Northamptonshire Credit Union, Sean Silver said: “Loan sharks have always been operating in the town and have always been illegal. We want people to be able to budget, save and access money to borrow at affordable rates.
“This scheme is incentivised through funds drawn back through the courts, known as the proceeds of crime money. Anybody who regularly saves for 3 months, and can make regular savings of just £1 a week, is entitled to a £25 incentive in their bank account.
“Intelligence suggests there have been more loan sharks in this area, as they tend to focus on areas of high deprivation.”
While the main focus is within the Spring Boroughs area, the accounts for this scheme can be opened for any individual living in Northampton and will run until the end of the year.
This initiative ultimately helps to reduce debt in the short-term, but over time helps people to become better savers too.
The Mayor of Northampton, Councillor Christopher Malpas, was at Spring Lane Primary School to help launch the initiative.
He said: “People who are involved with the integrated benefit system are given a lump sum of money. We need to be in the position to help and assist them.
“They have never been in a position to do household budgeting before. We need to give these people the confidence to budget.”
Catherine Wohlers, Liase Manager of the England Illegal Money Lending Team said: “Nationwide statistics from the IMLT have secured more than 351 prosecutions for illegal money lending and related activity, leading to nearly 296 years’ worth of custodial sentences.
“As a result of this, they have written off £63.5 million worth of illegal debt and helped over 25,500 people.”