IDS launches scheme to fight loan sharks
Iain Duncan Smith has officially launched a National Housing Federation scheme that offers loans to social housing tenants.
The My Home Finance initiative, which was unveiled by Inside Housing in July, is designed to give tenants an alternative to door step lenders and loan sharks.
Under the scheme tenants are able to borrow around £500 with a starting APR of 29.9 per cent. This compares favourably with the rates of 200-2,000 per cent charged by other lenders.
The not-for-profit scheme is backed by 26 housing associations, Wates Giving, Royal Bank of Scotland, and the Department for Work and Pensions. Borrowers will be able to access debt advice as well as loans.
My Home Finance is being piloted in the west midlands. Branches have already opened in Hereford, Worcester, Walsall and Northfield, south Birmingham. By the end of October, further branches will have opened in Coventry, Tamworth, Dudley and Wolverhampton, and in Birmingham city centre and Erdington, in north Birmingham
If the pilot is successful the aim is to expand the scheme across England, offering up to 150,000 loans over the next 10 years.
Addressing the National Housing Federation conference in Birmingham this morning, Mr Duncan Smith said the government is worried about levels of debt in social housing.
‘It’s reassuring to know there’s a commitment out there to helping the poorest members of our society’, he said.
The secretary of state for work and pensions also spoke about housing benefit reform, calling the changes ‘inevitable’.
He said: ‘We have to reset the balance between benefits and worklessness… My purpose is not to hurt people but to reshape how we help them. We need to find new ideas to tackle worklessness in social housing.
‘The problem is that for too long we, as politicians, have been content to see a large proportion of the population consent to a culture of dependency.’