East Sussex Credit Union launches interest-free crisis loans

Monday 15 January 2024

East Sussex Credit Union has launched interest-free Tide-Over crisis loans in partnership with Sussex Crisis Fund &  Devonshire West Big Local, for people struggling financially during the coronavirus lockdown.

The Tide-Over loans are being funded by grants from the Sussex Crisis Fund administered by the Sussex Community Foundation, to offer loans to residents across East Sussex, and Devonshire West Big Local in Eastbourne to help Devonshire West residents specifically.

Ann Hickey, CEO of East Sussex Credit Union, says: “Credit unions lend from our members’ savings. We want to help people affected by this crisis, but are duty bound not to risk credit union savers’ money by lending to borrowers who are high risk. We have been getting loan applications every day from people affected by the crisis that we haven’t been able to help and we expect the volume to increase.

“This funding will help people struggling financially during this crisis – such those who are self-employed, in the gig economy or on a low wage topped up by Universal credit –  with a short term financial boost until government support kicks in, or they are able to start working normally again.”

The funding will cover lending capital and admin costs so that ESCU can help households with interest-free Tide-Over Loans up to £300 from now and into June. These loans will help recipients to maintain their housing, pay their bills, and feed their families. They will also benefit by becoming credit union members, getting positive messaging about good financial management, budgeting and an option to get a prepaid debit card. Loans will be processed next working day, and will not require a first payment for 3 months.

Each loan will have a nominal savings element to their repayments so that borrowers start to get into a savings habit. When they are able to save a larger amount they will be encouraged to start saving for a rainy day, which will help them deal with financial shocks in the future.

The credit union has also adapted its ‘All About Money’ programme – which provides tools and resources to those who work on the frontline supporting vulnerable groups – to a distance-delivery model to ensure this important work doesn’t cease when people might need it most.

ESCU CEO, Ann Hickey, added: “We were really concerned about the impact of the loss of our outreach services when we had to close our help points so we decided to make the resources available online to our members and local residents that needed help with budgeting due to reduced incomes. We are looking for ways we can support our community while we work remotely and this was one way we could still give assistance where it is needed.”