New moves to tackle loan sharks

A new way of helping people whose lives have been blighted by loan sharks has been launched in Sheffield.

Individuals and companies are being asked to invest in a special fund. The interest generated will be used to give affordable loans and money advice.

People putting money into the Sheffield Investment Bond will have their money returned after five years.

City council chief executive Sir Robert Kerslake said the bond was "a powerful weapon in the war on debt."

He explained that people in Sheffield on low incomes often had no access to a bank and could not borrow at usual rates of interest.

Ground-breaking scheme

"Instead they face extortionate rates of interest, which may be over 900%, charged by doorstep lenders who they can never hope to pay off," Sir Robert said.

"The money we can raise together through the Sheffield Investment Bond will be used in this ground-breaking city initiative to tackle the problem once and for all."

The investment bond will be managed by the charity Citylife.

Its chief executive Tim Jones said exclusion from mainstream financial services was common among people who changed jobs frequently or did not have a settled address.

"Unless you are in long term employment, long term residence at the same address and have a reasonable income, your only choice of lender may be a loan shark."