More people who are struggling with money will be able to get help thanks to a lending project.

The Kent Credit Union has received funding to help people on low incomes and benefits during the Covid-19 pandemic.

Gravesend Churches Housing Association has agreed to provide a grant of £5,000 to Kent Savers Credit Union so it can issue up to £100,000 of additional loans.

Credit unions are member-run organisations where members pool their savings so they can lend to one another. Kent Savers has to maintain a ratio of 5% in capital of the money it lends.

The Maidstone based Credit Union was gifted the additional funding in recognition of the essential role it continues to play during the coronavirus crisis.

It provides ethical, affordable loans to people on low incomes and benefits, or with poor credit scores.

The financial co-operative offers loans from as little as £300, doesn’t apply any upfront or penalty charges or fees, offers weekly or monthly repayments to suit income patterns and can lend for up to five years.

Joe Scullion, chief executive of Gravesend Churches Housing Association, said: “At this time of severe financial distress for so many, access to personal loans from a socially responsible lender charging affordable interest rates is more desperately needed than ever.

"We’re concerned that the financial impact of coronavirus on many of our residents may push them to seek loans from short term high-interest credit providers such as Payday Lenders, or – worse still – illegal loan sharks.

"We’re keen to promote and support Credit Union borrowing, and to dissuade people from paying extortionately high interest rates elsewhere when they don’t need to.”

All Kent Savers borrowers are required to save as they borrow and build up a savings pot over the term of their loan.

This reduces the need to borrow for future emergencies and helps reduce money-related anxieties.

The Credit Union core mission is to promote savings and financial resilience and Kent Savers will be working with GCHA to support their residents’ financial wellbeing both during and beyond the most immediate challenges.

Kent Savers’ treasurer Gavin Richards said: “We’re extremely grateful to GCHA for contributing to our lending capital at such a critical time for our local communities and for our business.

"The timing of this support for our loan book couldn’t be more helpful as Kent Savers is being called on to provide a lifeline to many people otherwise excluded from accessing fair credit, as well as support our existing borrowers with all the forbearance and debt relief possible.”

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