Council to tackle financial exclusion

Rochdale Council is to look at ways to address financial exclusion in the borough, after research revealed that a staggering number of people are borrowing money from loan sharks and other sub-prime lenders.

It has also been highlighted that a lack of affordable credit available to people in the deprived areas means a total of £1,400,000 is lost from the borough’s economy in excessive interest payments.

Financial exclusion occurs when people cannot access vital mainstream financial services such as bank accounts, affordable credit, money advice and insurance.
It is suggested that this contributes to child poverty and mainly affects vulnerable groups such as lone parents, the elderly, BME communities and disabled people.

Research carried out in Rochdale, which consisted of a resident survey of 301 households, found that 25 per cent of respondents were borrowing from sub-prime lenders including doorstep lenders, loan sharks, pawnbrokers or cash convertors.

A report presented to councillors at a cabinet meeting tonight (Monday 11 July) read: “Clearly it is imperative that this evidence be acted upon and that financial inclusion work is considered a priority for the borough.

“There is currently no provider of affordable credit and savings products for unemployed residents in the borough.

“The research recommends the expansion of two affordable credit providers Manchester Credit Union and East Lancs Moneyline in Rochdale borough.”

Rochdale Boroughwide Housing is working in conjunction with the Riverside Housing Association to enable the Manchester Credit Card Union to operate in the borough.

And the Council has agreed to support the expansion of East Lancs Moneyline within the Rochdale Borough in order to offer alternative affordable credit to residents, to be funded from the Priority Investment Fund.