Manchester Credit Union launches accessible finance scheme for taxi and private hire drivers
Manchester Credit Union has launched a scheme to help taxi drivers in north-west England access affordable credit and avoid falling into the clutches of loan sharks.
The project has been set up by the England Illegal Money Lending Team in partnership with Rochdale Borough Council’s Public Protection Service and Manchester Credit Union, using proceeds of crime money taken from convicted loan sharks.
MCU is working with local taxi and private hire drivers to help them save towards their future and borrow money affordably, the first time that taxi drivers in the region have been helped this way.
The scheme will allow drivers to save up so they can pay for the costs of running their cab, which can average around £4,000 a year. It will also allow them to get a low-cost loan from a safe and legal source should they need it. The scheme was launched after research revealed that drivers are vulnerable to becoming victims of loan sharks because of the costs of running their cab.
The first 75 drivers to sign up to a credit union account will be rewarded with two cash bonuses of £15 at 13 and 26 weeks, if they continue to save regularly. This will be paid for using the proceeds of crime money.
A further benefit is that drivers can deposit cash into their accounts at a number of places, including shops and garages, which are open late at night, so they won’t have to carry large amounts of cash in their cabs. In addition, members of the scheme will be given a debit-style card which will enable them to pay their licence fees electronically.
Drivers will be encouraged to sign up when they visit the council’s Public Protection Service to renew their licence or to access support.
Steve Valentine, Business Development Manager at Manchester Credit Union, said: “We understand how difficult it can be for taxi drivers to meet the high annual costs of maintaining their business, and that banks are often reluctant to offer loans to self-employed people. Many drivers resort to illegal loan sharks, as they think they have no other choice, but by joining the credit union they can take control of their finances and access affordable credit without having to resort to dangerous lending options.”
Tony Quigley, head of the England Illegal Money Lending Team said: “Loan sharks may appear friendly at first but they cause nothing but misery. They charge exorbitant rates of interest, often leaving people with little or nothing to get by on. We’ve also seen lenders resort to extreme methods such as violence, threats and intimidation. Schemes like this show that there are safe and legal alternatives available and that loan sharks are never the answer.”
Taxi driver Zafar Iqbal was among those who signed up on the day. He said: “I think that the scheme is really good. I’ve known of drivers who have borrowed from payday loan companies and they’ve ended up taking out further loans to cover the repayments on the first one. The fact that you can put small amounts away each week with the credit union by paying in when you’re filling up your car or going to your local shop means that you don’t notice that you’re building up quite a significant amount of savings.”
Nationally the Stop Loan Shark Project has secured over 212 prosecutions for illegal money lending and related activity, leading to 132 years worth of custodial sentences. They have written off almost £40 million worth of illegal debt and helped over 18,000 victims.
Manchester Credit Union is also available to residents who may have difficulty getting credit from mainstream lenders.