YourCU, which operates in Westminster, Kensington and Chelsea and Hammersmith and Fulham, is working with housing officers, Jobcentre Plus teams and workers’ unions to promote its services as a cheaper, alternative to companies such as Wonga.
Chief executive William Rhodes says the credit union provides a ‘safe and ethical way’ to borrow for people who need cash fast.
It would cost £20 in interest to borrow £1,000 from YourCU for one month, while a customer would have to fork out £127.15 in interest and fees to borrow £400 from Wonga for the same period.
Mr Rhodes said: “Loan sharks are currently winning the battle because they’re on the doorstep where people need them.
“Credit unions should go out among the people, just like payday lenders, to get their message across. You can’t expect people to come to us.
“It is vital residents on low incomes have access to affordable finance, a bank account, and advice on how to manage their finances.”
YourCU holds regular pop-up advice sessions at Beethoven Centre in Queen’s Park, Dalgarno Community Centre, North Kensington, Earls Court Health and Wellbeing Centre and at the tenant management organisation offices in the World’s End Estate, Chelsea.
The Dean of Hammersmith and Fulham, Canon Guy Wilkinson, showed his support for London Plus Credit Union last month, while the Bishop of Kensington, Paul Williams, recently opened an account with YourCU to support the Church’s bid to tackle payday lenders.
The union said there are an estimated 24,500 financially excluded households in Kensington and Chelsea, each paying what it calls a ‘poverty premium’ of up to £1,000 a year through higher borrowing costs.
Mr Rhodes added: “We need to ensure a way out for people trapped in an endless cycle of debt and 5,000 per cent interest rates, from which many can see no way out.
“Credit unions also give more affluent residents in the area an opportunity to invest their money in a venture that will benefit their local community as well as giving them a financial return.”
Visit http://www.yourcu.co.uk for more information.