Community Banks are the alternative as Britain’s biggest payday lender, Wonga has collapsed into administration
Wonga collapsed into administration last week after a flurry of compensation claims over improper sales practices, with an estimated 200,000 customers still owing more than £400m in short-term loans. Northern Community Bank, like many ethical lenders and campaigners that aim to end high cost credit, will not shed any tears for the Payday Lender that has heaped misery on many people in our community.
Wonga’s 1509% representative APR on loans will not be missed
Importantly Wonga’s borrowers have been told to keep making their payments as usual despite the collapse, after singing a loan agreement this is their legal obligation.
However Northern Community Bank, and many Community Banks across the UK are ready to step in and provided an affordable and ethical alternative. We have always been available for members of our community who are using Payday Loans, who want to get out of the cycle of never ending expensive loans.
Northern Community Bank joins calls from campaigners across the ethical finance spectrum, who say that the government and regulators should promote Community banks to replace the high cost lenders to protect borrowers.
Michael Sheen, who started the End High Cost Credit Alliance, aiming to promote more affordable borrowing said
The real danger is that those customers are going to turn to possibly even worse places,
Sheen added.
There is an opportunity here to support fair and responsible credit providers and help them grow big enough to handle the amount of people that were going to Wonga before.
Another prominent campaigner against the high cost credit industry, Stella Creasy MP, has contacted John Glen, the economic secretary to the Treasury to voice concerns that as we have seen providers of high interest credit such as Wonga disappear previously, they have often been replaced by another seemingly as expensive.
Whether we consider the move of high-cost credit companies like Provident into providing credit cards under the Vanquis brand, or the development of Amigo loans, which use guarantors to underwrite loans and so evade requirements about respect for debt repayment plans, consumers continue to be exploited by these forms of lending.
The latest figures released regarding Wonga’s lending suggested they had lent out £430m, with an average loan of £237. We compared a loan from Northern Community Bank to see how the figures stacked up
At Northern Community Bank we have sympathy with the 500 workers who have been made redundant with Wonga collapsing into administration, but our main concern are members of Burnley and Pendle’s community that have been, and continue to be charged eye watering rates of interest on loans.
We understand that there are situation where people need to borrow cash quickly, we say contact Northern Community Bank first, if you have already used a high interest lender like Wonga and would like to discuss re-financing a loan contact Northern Community Bank today.
