Credit boost aims to help families avoid pay day lenders

Struggling Falkirk families could in future be able to avoid 'extortionate' pay day lenders by gaining greater access to affordable credit.

The Scottish Government is to add £2 million to the Carnegie Trust’s Affordable Credit Loan Fund, doubling its size.

The move is part of the Holyrood administration’s plan to tackle child poverty, and aims to ensure people can access financial products and services that meet their needs in a responsible way.

Equalities Secretary Angela Constance said: “Insecurity of income is one of the biggest challenges faced by those in poverty.

“We are showing how Scotland is leading the way on tackling the problem of access to affordable credit.

“We want to provide a clear alternative to organisations, such as payday lenders, that can often charge extortionate interest rates and can leave people trapped in a cycle of debt.

Martyn Evans, Chief Executive of the Carnegie UK Trust, said: “The launch of the first Child Poverty Delivery Plan is a hugely significant milestone in the drive to eradicate child poverty in Scotland.

“At present, those in poverty have to pay a significant premium whenever they borrow money.

“This has to change. We need to make more affordable, socially-motivated credit, linked to other services, far more widely available”.

He added: “We are therefore delighted that the Delivery Plan includes a commitment to invest in the Carnegie Affordable Credit Loan Fund and provide new investment to those not-for-profit lenders giving people a much fairer deal.”