Community bank scheme aims to help as figures reveal almost 4k Luton people caught in loan shark trap

More than 3,700 Lutonians are using loan sharks it has been revealed, as the council promotes a community bank to help people caught in the cost of living crisis.

With many families facing extra costs over the summer, Luton Council is reminding local residents that they can get lower-cost credit from Luton-based not-for-profit lender Money Matters Community Bank.

Research carried out for Luton Council conservatively estimates that 3,730 local people are using loan sharks while another 12,400 people are using subprime loans.

Lutonians currently receiving child benefit payments can now save on loans against future benefit receipts. Monthly payments come out automatically, and they can also choose to put a small amount monthly into a savings account to build a cushion for the future.

A recent study revealed participants in child benefit savings and loans schemes reported an increased confidence in managing their finances and experienced notable improvements in their overall well-being and mental health.

Money Matters Community Bank provides a significantly lower-cost alternative that enables Luton residents to escape illegal money lending and the debt spiral of extremely high interest rates.

Local people who have any information or concerns about loan sharks operating in their area are also strongly encouraged to report anonymously to Stop Loans shark helpline via 0300 555 2222 or online.

Cllr Hazel Simmons MBE, Leader of Luton Council, said: “There is desperate need for affordable credit in Luton, with over 12,000 local people in Luton having loans valued at over £20m from high-cost credit providers at a repayment cost of £33m. Around 3,700 people here are in debt to loan sharks, according to an independent review of affordable credit in Luton commissioned by Luton Council.

“Prices of food and many other essentials continue to soar and with interest rates going up, it’s even more important that people are not forced into the arms of high cost lenders and loan sharks.”

Dennis O’Connor, Interim Chair of Money Matters Community Bank, said: “Our mission at Money Matters Community Bank is to provide fair, affordable and accessible financial products and services to all members of our community. Everyone deserves the right to low-cost loans and savings accounts, regardless of their financial background or income level.”

Cllr Javeria Hussain, Chair of Luton Rising, said: “Luton Rising, as the owner of London Luton Airport, has since 1998 provided almost £500 million for the local community, supporting public services and community investment projects that have transformed the lives of tens of thousands of vulnerable people. We are delighted to be supporting local residents by helping them access financial services from Money Matters Community Bank. Providing financial empowerment to local residents is vital to building a strong and thriving community.”

Luton residents can borrow up to £700 with a fixed interest rate of just 33.5% APR, which beats the exorbitant rates charged by most payday lenders. Plus, repayments are spread over 52 weeks, making it easier for them to manage. Loan repayments are deducted directly from their MMCB account on a weekly basis – hassle-free!

Residents can get access to the range of affordable and competitive loans, savings accounts and more just by depositing £10 to open an account at the bank.

Visit the Money Matters website to learn more.

For help and support with the cost of living crisis visit the council’s website.