Loan sharks could find their days numbered if government proposals to help people find credit are successful.
David Blunkett, secretary of state for work and pensions, has announced that £36 million will be allocated to the Growth Fund to boost credit unions and community development finance institutions, as well as £210 million to the Social Fund loan scheme.
The Growth Fund aims to make affordable credit available to people who would usually seek loans from loan sharks with cripplingly high interest rates.
Blunkett said: “From next spring, the benefits system will ensure that the threshold above which savings are counted will be doubled for people of working age.
“For those seeking help through the Social Fund, an additional £210 million means loans will be increased, repayment periods extended, repayment rates reduced, and administration simplified.”
Figures from the British Bankers Association (BBA) indicate that home loan approvals are up for the month of August, nine per cent more than last year; proof that the financial industry is also responding to the need for affordable credit.
There is also more support for first-time buyers, such as the Yorkshire Building Society offset mortgage which allows family members to help with mortgage repayments, as banks look at ways to offer more credit in light of the steady increase in house prices.
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