Amigo Loans Comments On Civitas Report On Credit Unions
Press Release - 18 June 2013
In its report ‘Credit Unions: A Solution to Poor Bank Lending?’ Civitas calls for Credit Unions to be allowed to charge more and take larger deposits from businesses if they are to provide a viable alternative to payday lenders. Civitas calls on ministers to allow credit unions to raise their interest charges to 3 per cent but pass on the processing fee to the consumer in full, and for the current limit on deposits to be removed for businesses.
James Benamor, founder and CEO of guarantor loan company Amigo Loans comments: "The proposals from Civitas can’t come soon enough for UK consumers and small businesses, as government reforms have not gone far enough to support credit unions and spur growth in the sector. Outdated restrictions on fees and deposit size have for a long time meant credit unions have not been seen as a viable alternative to payday loans. But let’s turn on the spotlight, apply the pressure and force ministers to sit up and listen – the more noise we make about alternative loans, the closer we get to a marketplace where bogus quick-fix payday lenders don’t rule. It is beyond scandalous that speed and ease supersede price, rollovers are considered key profit drivers, and un-affordable customers are actively sought."
"Credit unions simply can’t be effective charities and a real alternative to payday lenders, unless they are first able to act as convincing financial institutions. If the government grants the changes suggested by Civitas, the result will be that more people get the financial support they desperately need. Amigo Loans is already offering an alternative to payday at a similar rate offered by credit unions - without the fees. Our lending is based on trust, personal endorsement and one-to-one interviews, where affordability is always front of mind."