Greater Manchester credit unions have come together to unveil a new loan to help residents in the city-region struggling with the current cost of living crisis.
The Sound Pound loan was launched at Manchester Credit Union by the city-region’s mayor Andy Burnham with the support of Greater Manchester Combined Authority (GMCA).
The loan is for people who are looking to borrow a small amount of money and are new to credit unions and currently feeling the pinch as spiralling costs cause a squeeze on household finances.
Here’s how you can apply for a Sound Pound loan and why it has been brought out.
What is a Sound Pound loan and how does it work?
The loan has been created by the Sound Pound consortium, which brings together Greater Manchester’s credit unions to help people currently struggling with the rising costs of essentials such as food and energy.
People who have not used a credit union before and are feeling squeezed financially are able to borrow an amount between £200 and £1,000. This will then be repaid with an annual interest rate of 3% per month on the reducing balance.
All eight Greater Manchester community credit unions have signed up to offer the loan. This means it is available at Cash Box Credit Union in Tameside, Hoot Credit Union in Bolton, Manchester Credit Union, Oldham Credit Union, Salford Credit Union, South Manchester Credit Union, Stockport Credit Union, and Unify Credit Union in Wigan.
Credit unions are financial co-operatives run on a member-owned, not-for-profit basis. All deposits of money with them are covered by the Financial Services Compensation Scheme.
The new loan is being made available in the city-region as the Greater Manchester Residents’ Survey found that 24% of people quizzed are seeking financial information or support for the first time. The credit unions suggest that this means the cost of living crisis is impacting on people who have not experienced difficulties with money before.
What has been said about the Sound Pound loan?
Sheenagh Young, chair of Sound Pound and the CEO of South Manchester Credit Union, said: “With the ongoing cost of living crisis, we know there are many people living in our communities who usually get by ok but are now experiencing a real squeeze and are unsure where to turn for help.
“As credit unions, we can help and our new Sound Pound loan is our response to help local people get back on track and avoid any long term impacts of inflation and rising household costs.
“Credit unions have existed in local communities across the UK for over 50 years and responsible lending is in our DNA. We work with individuals to help them through challenging times so that they can grow their financial resilience and kickstart savings habits for the long term, whatever their income level.”
Andy Burnham, the Mayor of Greater Manchester, said: “Credit Unions have a key role to play in the financial crisis that we all now face. I’m delighted to see them come together across Greater Manchester to provide a local and ethical alternative to the high-interest payday loan companies and loan sharks.
“Credit Unions represent a positive, safe solution to short term credit pressures. Sound Pound is a fantastic initiative that shows Greater Manchester is doing things differently and coming together to support each other.”