A CREDIT Union is celebrating after making over £500,000 in loans to residents of east Durham.
The North East First Credit Union has recently seen a huge increase in membership thanks to a partnership with the East Durham Area Action Partnership and the East Durham Trust.
Often described as “people’s banks”, credit unions offer an alternative to traditional high street banks and as non-profit organisations can offer far more competitive rates of interest than alternatives such as pay day lenders and finance companies.
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Throughout 2016 a team of volunteers were recruited and several new collection points were set up in local community venues in former mining communities, such as Shotton and Wingate. Over 600 additional members have joined the credit union and are now saving regularly.
East Durham Trust chief executive Malcolm Fallow said: “We are living in times of austerity and public spending cuts which are having a devastating impact on people’s financial well-being.
“The credit union clearly has a role to play in helping people to avoid the poverty trap.”
Mr Fallow said the trust found that many people it helped were in dire financial straits, which could have been avoided if they were members of a credit union. He said: “Credit unions tend to be strong in other parts of the country and offer an alternative for people, particularly for taking out loans.
“Often when people are in financial difficulty they turn to support that can be negative in the longer term, such as as payday loans and loan sharks.”
Cllr Alan Napier, deputy leader of Durham Council, which has supported the campaign through the Area Action Partnership, said: “Household debt stands at £1.6 trillion pounds across the UK, inflation has risen to 1.6 per cent, with many households finding it difficult to keep pace with the cost of living.
"Reaching £500,000 is a significant milestone and our credit union will continue be a huge benefit to some of the most financially vulnerable within our society.”