Sheffield Money, a new lending service, has opened in the city and will compete against high-interest lenders offering payday loans, as they provide advice on alternative loans and bank accounts, as well as operating as a broker.
Regulated by the Financial Conduct Authority (FCA), it is claimed to be the first such project in the country. It is believed that approximately 25,000 residents will use Sheffield Money over the next year.
Customers will have access to as much as £7,500 in loans, credit for white goods, savings and bank accounts. They can also receive advice on things such as budgeting.
Sheffield City Council provided a grant of £220,000 for the company to be set up, which will provide broker services, matching customers with financial products. It is estimated that Sheffield Money can save locals as much as £20m each year, compared to if they used other sources to receive money.
More than 50,000 people (almost one tenth of Sheffield’s population) are estimated to be borrowing money in the city, at an average of £800 each, and these loans are subject to very high interest rates. Failing to repay on time can cause quite severe financial problems, even in spite of the rule changes introduced in January.
“Payday and doorstep lenders have been ripping off and exploiting people most in need of credit, especially some of the most vulnerable people in our city, preying on their need for available credit and charging extortionate rates,” said Julie Dore, the Labour council leader.
“People need a real alternative which will stop them being forced to go to these notorious lenders. That is why we have worked hard to create a new, ethical and affordable credit option by starting Sheffield Money.”
Sheffield Money is based in Cambridge Street, and is open weekdays from 9am till 5pm.
