A housing association has set up a savings-and-loan service for tenants excluded from high-street banking services.
Mercian Housing Association has joined with Bank of Scotland to offer loans of up to four times the borrower's savings – with a £2000 limit – and emergency funds, for residents of its 3500 Birmingham-based homes.

Poor credit histories mean 8 million people are denied loans by banks and building societies. Many turn to doorstep lenders who charge rates as high as 164%.

Mercian will charge 8.3% APR on standard loans and 11.6% APR on emergency ones – 4% and 7% above base rate respectively. There are no administration fees or early repayment penalties.

Neil Alexander, director of financial inclusion development at Bank of Scotland, and Stacey Glen, money advice officer at Mercian, are pictured launching the scheme.

Source

Housing Today