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Fair-price loan shop bites into loan shark profits

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This lifeline comes in the form of easy-to-access affordable credit from My Home Finance, a not-for-profit service launched by the National Housing Federation (NHF) with support from leading housing associations and other organisations.

The West Midlands pilot project is already helping dozens of low-income customers to borrow relatively modest sums of around£300 - often to buy everyday items such as a washing machine or furniture, or to pay off pricey doorstep and payday loans.

Erdington is one of the latest additions to the branch network -and local MP Jack Dromey will meet staff at Central Square Shopping Centre on Friday, January 21, to hear about their work and to carry out the official opening ceremony.

He will be welcomed by My Home Finance manager Itisam Akhtar and representatives from Bromford and Mercian Housing Association as well as other housing associations that support the service. Representatives from the NHF, RBS and Wates Foundation will also be there.

James Walsh, Bromford's economic inclusion manager, believes that My Home Finance can make a huge difference to the lives of social housing tenants and others on low incomes who are financially excluded.

He said: "It's shocking that the people who can least afford it feel they have no option but to borrow from doorstep lenders or loan sharks - often at sky-high rates of interest that can be anything from 150 to 2,000%.

"Compare this with My Home Finance's starting APR of 29.9% and you see how this can change people's lives. They have a realistic chance of paying off their debt and have more left over to spend on their families."

Mercian's community investment manager, Bob Candlin, agrees, saying: "It's not just a question of making it possible for vulnerable people to borrow at much less expensive rates.

"My Home Finance branches also offer friendly advice and help with banking, savings and contents insurance - encouraging people to build up their savings and to take control of their finances. This is a fantastic opportunity for social housing residents - and anyone else in the community - to improve their life chances."

It's estimated that around 2.5million people in the UK borrow from doorstep lenders at rates of almost 300% for new customers and a further 200,000 borrow from illegal loan sharks at rates of anything up to 2,000%.

My Home Finance office manager Itisam says many customers tell of bad experiences with doorstep lenders and loan sharks - and appreciate the offer of fair loan at fair prices.

He and his team have completed more than 20 loans since the Erdington High Street shop opened in mid-December, with a typical loan being between £250 and £500.

"We've had a very positive response from local people," says Itisam, who works alongside one full-time and two part-time loans officers. "It's been the same at our other shops in Northfield and Birmingham city centre. There is clearly a local need for affordable loans, as well as the other services we offer, and we have already had enquiries here at Erdington based on word-of-mouth recommendations from other customers who have just taken out loans.

"With the three offices in Birmingham, we are aiming to reach out across Birmingham by providing people with a truly affordable alternative to the doorstep lenders and illegal loan sharks that they have previously turned to during times of need."

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