Leading retailers are joining forces to help retail staff who find themselves in financial difficulties.
Morrisons and Booker, as well as chains such as New Look, Matalan, Ryman and Superdrug, are supporting proposals for a credit union, called Retail Cure, to make loans of £300 to £15,000 available for anyone in retail who needs financial help. Some £800,000 has already been committed by companies to the credit union.
Retail Trust said loan rates would be competitive. For example, a short-term £400 loan borrowed over 30 days would cost £23 - against a cost of £127 with a payday loan company. This is based on a 39.3% APR, against 5,853%. It added that discussions with the appropriate regulators had begun and that if its application for formal regulatory approval was granted, the union would be launched in late 2014 or early 2015.
“Hard-working people in our sector are easy prey for payday loan companies and other forms of loan sharks,” said Retail Trust chairman John Lovering, who will chair Retail Cure. “There is a real need for a quick source of credit for lower-paid people who work hard but cannot get a bank loan or only need money for a few days.”
Retail Trust CEO Richard Boland added: “We have in the last year alone seen a 60% plus increase in worried staff contacting our helplines with money concerns. They face a constant challenge balancing budgets and without access to sensibly priced debt they can find it hard to manage the natural peaks and troughs of expenditure.”