Charities call for easier credit access

By Sasjkia Otto

A coalition of nearly 200 charities has written an open letter to party leaders urging them to make it easier for the poor to get credit.

The letter comes on the day of the third leaders’ debate focusing on the economy.

Written by the Better Banking coalition, the letter called for a system that encourages banks to engage with low income households, which lose an average of £1,000 each year through lack of access to banking services.

It said: “Around 6 million people cannot access mainstream credit – often due to having no credit history, not a bad one – and have no choice but to borrow at interest rates of up to 9,000%, leading to inescapable spirals of debt.

“We feel strongly that in return for the privilege of a banking licence, and billions of pounds of public investment, we need a new settlement between society and the financial sector.

“Many of us take credit for granted, with our mortgages and student loans. But low-income communities, third sector organisations and small businesses suffer from unfair access to financial services.

It concludes: “Responsible lending. advances us socially and financially.”

The letter also asks the prime ministerial hopefuls to commit to holding banks accountable by making public disclosure of lending information compulsory, providing incentives and obligations for banks to serve social responsibilities and reinvesting one per cent of banks’ profits for public benefit.