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MSE News: Government-backed lender launched to help low earners
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Hia all
I do understand that this may be seen as encouraging people to spend money they haven't got.
However we have to be realistic - thousands of families are falling victim to loan sharks, and predatory loan companies charging ludicrous interest rates because they cannot otherwise access credit. Companies like provident deliberately target vulnerable people and poverty stricken areas. I live on an estate and receive an endless stream of letters from them. I had several last year before Christmas including one leaflet that said "Why shouldn't you be able to buy nice things for your friends and families? You CAN with Provident!"
As the government has refused to clamp down on these companies, there has to be an alternative.I'm sure many of you will say 'there IS an alternative - don't take on a debt you can't afford to pay!' but it's not always that simple -emergencies do happen, benefits often don't go very far - and lots of people don't have family or friends to help them out financially.
Yes, there are people who aren't particuarly sensible, or bright - but often these are vulnerable peope who need help and support more than most, and we shouldn't just throw them to the dogs.
One poster said that if someone needs a washing machine they can 'get it off the social'. Help from the social fund is far from guaranteed, and most of it is only available to people who have been claiming specific, income related benefits for 26 weeks or more.
The only help universally available from the social fund is crisis loans which can be difficult to get - you have to prove there is an immediate risk to the health/safety of you or your family.
Budgeting loans are an option for people who have been claiming income related benefits for 26 weeks or more - but they have started charging huge weekly repayments. I had a budgeting loan for 700 pounds recently and am paying back just under 30 quid a week. And again, they are not guaranteed.
Community Care Grants - the only form of help that doesn't need to be repaid - are only available in very specific circumstances (your family suffering exceptional pressures, or someone who has lived an unsettled way of life resettling with the help of a charity, someone leaving an institution....), and lots of people struggle with the application forms. Community Care Grants are only for 'essential' items, and the DSS's idea of essential is very different from most peoples. I got a CCG when I moved (with my children) into a council flat from a homeless hostel - and was not awarded money for a chest of drawers. I was told this was not essential as i could 'keep my clothes in bags' (seriously). Curtains are not considered essential, nor are carpets.
Social fund loans/grants can also take AGES to process. In my area recently, budgeting loans have been taking 7 weeks to process. I waited 6 weeks for a crisis loan.
What I'm trying to get at here is that Social fund help is not at all reliable.
Having said all of the above, I do have reservations about this scheme - I think investing in credit unions (and maybe encouraging them to lend to people on benefits if they don't already - sorry this isn't something I know about!) would be a much better option, because as someone else has said, this encourages financial responsibility.0 -
This is all well and good, but what happens when you don't have a local credit union. I have looked but there isn't one in the area. The next nearest are over 10 miles away. One is only for people in or ex emergency services and the other has a limit to the local area.
Ali x0
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