No interest loans scheme for Ludlow

78288909 (4687533)

78288909 (4687533)

First published in News

HARD up people in Ludlow and the surrounding area will have access to a new loans scheme.

A no interest loans scheme (NILS) that has been operating successfully in Tenbury is opening a ‘pod’ in Ludlow to provide people in desperate circumstances with credit.

The pioneering scheme has its origins in Australia and was introduced into Tenbury which is believed to be the first place in the UK where it is available.

It is fundamentally different from Credit Unions in that there is no interest or administration charge and people simply pay back what they borrow.

But the other difference is that the loan is not paid in ‘cash’ but in the form of a ‘credit’ that can be used to make a purchase with local suppliers.

Therefore, there is a boost back into the local economy with traders in the area getting some benefit.

Criteria for the borrower are that they must be in financial difficulties and will usually be on benefit.

It must be used to acquire essentials such as washing machines, other ‘white’ goods, and clothing like school uniforms or medical equipment.

The repayments are agreed and made over 12 or 24 months either on a weekly or monthly basis.

In the event of failure to repay the NILS scheme says it has an agreement with the Department of Work and Pensions that would enable money to be collected from the borrowers’ benefits.

But it is stressed that this is only used as a last resort when every effort to reach an arrangement on a revised payment plan has been achieved.

However, other funding has been provided including a small investment from Malvern Hills District Council. The scheme hopes that charitable status will enable it to apply for other sources of funding.

Its long term vision is to apply to become a credit union but this is not in the immediate future.

Initially the scheme was funded by a £5,000 philanthropic loan provided by an anonymous beneficiary in the Tenbury area.

There are currently about 30 ‘customers’ and the maximum amount of money that can be borrowed is £400.

“We have decided to open a ‘pod’ in Ludlow because of the level of demand,” said Sarah King who administers the scheme.

It will begin in Ludlow on Tuesday April 1 and will be open every Tuesday and Thursday operating from The Foyer in Ludlow between 10am and 2pm.

“We are very grateful for the help that we have received from people like Kim Skinner of the South Shropshire Housing Group who has made it possible for us to set up in Ludlow,” added Sarah King.

It is intended that the scheme will give people who need credit an alternative to commercial borrowers.

Obtaining loans from the traditional banking sector has become very difficult since the banking crisis and many new entrants to the sector have been criticised for the level of interest and other charges added to the fact that people who struggle to repay can find debts spiralling out of control.

More information is available by calling 01584 811512.

Send us your news, pictures and videos

Most read stories

Local Info

Enter your postcode, town or place name

About cookies

We want you to enjoy your visit to our website. That's why we use cookies to enhance your experience. By staying on our website you agree to our use of cookies. Find out more about the cookies we use.

I agree