Page last updated at 10:47 GMT, Saturday, 20 March 2010

Torbay community bank offers loans to poor

Torbay credit union
An estimated 17,000 people in Torbay are excluded from mainstream banking

A community bank aimed at people on low incomes has opened in Torquay.

The Money Matters shop is open six days a week and contains a credit union and financial advice service.

A credit union is a savings and loans co-operative owned by the members, run by the members for the benefit of the members.

The idea is that the members of a credit union pool their savings together. This common fund then provides a pool of money for loans.

'Low cost alternative'

It is thought that about 17,000 people in the Bay are excluded from mainstream banking.

Many turn to loan sharks for money and end up paying extortionate levels of interest.

One of the first through the door was Keith Crook, who is disabled and on benefits.

He wanted £70 for a new fridge.

Devon Community Foundation provided a grant of £39,000 for the centre.

The Centre will house Plough and Share Credit Union and not for profit company Torbay Pound, which offers free advice to people struggling with debt and financial issues.

'Spiral of debt'

Helen Esjemont, general manager of Plough and Share, said: "Low income, credit rating problems and the impact of the recession means that an estimated 17,000 people in Torbay are financially excluded.

"They find it difficult to access services from ordinary high street banks like opening a bank account or securing a loan or overdraft.

"This can result in people using high interest lenders and getting caught in a spiral of debt and repayment charges."

"We can offer those who do find themselves excluded in this way a real and professional low cost alternative."

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