Credit Unions Are Here to Support Victims of the Loan Sharks with ‘Friendly’ Façades

Friday 26 January 2024

New data has revealed that many people are victimised by loan sharks who they originally considered as a friend or colleague. The Centre for Social Justice has uncovered that over a million people are currently paying illegal money lenders in England alone which equates to more than 1 in 50 adults.

This figure shows the worrying scale of the harm loan sharks cause across England (and the rest of Britain). Furthering understanding, the Illegal Money Lending Team (IMLT) has gathered data which shows that 56% of loan shark victims originally considered their lender to be a friend, while approximately one in ten had met them at work.

Adele Atkinson, Professor of Practice in Financial Literacy and Wellbeing at the University of Birmingham highlighted in a piece for The Conversation the importance of credit unions in serving the underserved. With few banks or building societies willing to lend to those facing financial difficulties already, many struggling people turn to illegal money lenders if they are unaware of credit unions. Although it is growing, public awareness of credit unions is low and the importance of raising the profile of credit unions cannot be overstated in the pursuit of increasing financial inclusion.

Credit unions are an ethical and safe alternative to loan sharks for those seeking access to credit. Professor Atkinson recognises this and urges anybody at risk of being victimised by loan sharks to explore borrowing from your local credit union, which you can do here. Amongst highlighting the importance of credit unions, the article urges anybody who has become a victim of loan sharks to seek help from Stop Loan Sharks.

As loan sharks continue to prey on the financially excluded and vulnerable, credit unions are doing all they can to support communities through this turbulent economic time. As seen recently, credit union membership across Great Britain has never been higher as the sector continues to serve more members than ever. This is a positive sign that credit unions are being utilised more widely – a trend we hope to see continue.

Commenting on the important role the credit union sector has in reducing the need for people using loan sharks, ABCUL CEO, Robert Kelly said: “Many people deserve fairer and more responsible financial products and services that are affordable and reliable. Credit unions have a proven track record of building financial resilience in communities and workplaces across the country – that typifies the credit union business model as the ethical alternative within the financial services marketplace.”

Source: The Conversation