The Association of British Credit Unions (Abcul) has welcomed the government’s proposed actions against illegal lenders.
Mark Lyonette, chief executive of credit unions representative Abcul, has called the announcement made earlier in the week by John Hutton “fantastic news”.
The move could see the reduction in lenders that target the sub-prime and non-standard market, who because of a lack of debt advice, turn to such lenders believing they have no other option.
“The government’s latest investment in cracking down on loan sharks will add extra weight to our work promoting safe, affordable financial services,” Mr Lyonette said.
“Our message is that there is no need for people to turn to illegal lenders.”
Mr Lyonette added that credit unions are an example of the “many legitimate alternatives” that exist to loan sharks, with people looking for a debt solution able to seek this elsewhere rather than borrowing more from illegal lenders.
Mr Hutton, secretary of state for business, enterprise and regulatory reform, pledged £3 million to the anti-loan shark action earlier this week.