Nottinghamshire County Council is to give a £20,000 grant to Nottingham Credit Union (NCU), so more people in Mansfield and Ashfield can take advantage of savings accounts and affordable loans.

Around 540 people in Mansfield and Ashfield currently use the credit union but it needs to recruit over 1,000 more members to make a local service viable.

Saving regularly with a credit union is particularly beneficial for people on low incomes, by offering them access to affordable loans a chance to save and learn about better money management.

Further benefits of a credit union to the local community include:

•much lower interest rates on loans than those offered by payday lenders means less money is swallowed up in interest payments and instead is spent locally
•reducing the demand for debt advice services which are already under strain, especially in the period following Christmas
•reducing stress levels and demand on health services – research by Dr Gathergood of Nottinghamshire University in 2012 showed people struggling to pay back loans are three times more likely to suffer mental illness.
The interest charged on a £400 loan over 32 weeks from Nottingham Credit Union would be £48 – around half the interest charged by a leading payday loan company for the same loan amount, which would need to be repaid in 30 days.

The Deputy Leader of Nottinghamshire County Council, Councillor Joyce Bosnjak, who chairs the Grant Aid Sub Committee, said: “In many areas where there are a lot of low income families, pay day lenders have been meeting the demand for small loans – often charging extortionate interest rates and putting those who can least afford it into financial difficulties.

“By helping to raise the profile of the credit union in Mansfield and Ashfield we want to make the service self-sufficient and provide an affordable alternative for local people that also promotes saving and better money management.

“A thriving credit union is also good news for the local economy – ensuring more money is spent in local shops and the community, rather than filling the pockets of the payday lenders.”

Ella Ferris, General Manager of Nottingham Credit Union, said; “We know that our loans save local people lots of money.

“The support we get from Nottinghamshire County Council helps us run our shop in Mansfield so that local people can get to us more easily. Although more and more people are now joining us online, our shop is very important to local people. We help thousands of local people save money through lower interest charges and we also encourage them to put money away for rainy days.”

For further information about Nottingham Credit Union call 0115 828 3121 or check out the online branch at www.nottinghamcu.co.uk