Council looking to combat ‘sky high’ loan firms

Falkirk Council wants to set up a CDFI to stop people getting into unnecessary debt
Falkirk Council wants to set up a CDFI to stop people getting into unnecessary debt

The local authority wants to battle back against sky high interest loan firms with its very own not-for-profit lending operation.

Next week’s Falkirk Council executive committee will discuss the formation of a Community Development Finance Institution (CDFI) for Falkirk, Fife and West Lothian.

At last month’s budget meeting £250,000 was set aside for the CDFI and council leader Craig Martin made no secret of his desire to set up the organisation.

He stated: “I have worked hard with partner councils to support a fund to stop the most vulnerable in Falkirk using loan sharks and disgusting services. I’m extremely proud to move additional funding to get the CDFI up and running in the next month or so.”

CDFIs are specialist enterprises, often operating on a not-for-profit basis, which deliver finance and other support services to enterprises and individuals. They are independent organisations which provide financial services with two aims – to generate social and financial returns.

They supply capital and business support to individuals and organisations who help create wealth in disadvantaged communities.

Members of the executive committee, who meet on Tuesday, will decide whether or not to contract the firm Five Lamps to deliver CDFI services in Falkirk.

It will also discuss the possibility of allowing the council’s director of corporate and housing services to work towards implementing the initiative.

They will also look at accepting, if offered, extra funding from the Money Advice Service to cover the set up, first year running and initial project evaluation costs and decide whether to provide £100,000 of funding from the Fairer Falkirk Fund towards loan capital.