17th February 2010
Banks are being urged to help millions of people in the UK who
do not have access to banking services.
Nearly seven million people in the UK are excluded by the banks
and cannot access loans, overdrafts and credit cards, says The
Better Banking Campaign.
The campaign - which has been organised by a body of charities
and local groups - highlights the fact that many people are forced
to take out payday or home credit loans, which usually offer small
sums with astronomical interest rates.
According to the Treasury, 1.75m people do not even have a basic
current account with a bank.
Steve Wyler, spokesman for the campaign, criticised the banks,
many of which had been "propped up" by the taxpayer, for not
supporting the people and businesses most in need of financial
assistance.
"Most people believe access to bank accounts and affordable
credit are basic rights, so we want to see this as a priority for
all the political parties," he said.
According to the Treasury, 1.75m people do
not even have a basic current account
The campaign said millions of people with decent finances are
being denied access to mainstream credit because they have no bank
account, no credit history or no penalty payment charges.
It is demanding that incentives and obligations are given to
financial institutions to ensure that they offer services to people
who are currently excluded. It also wants a legal cap imposed on
excessive interest rates.
It is also calling for banks to be more transparent and disclose
where they get their money from and where it is invested.
A recent survey by the group showed that 70% of people thought
having access to mainstream financial services should be a basic
right.
The group believes that those excluded by banks could be pushed
toward dangerous payday lenders and home credit companies which can
charge "sky-high" interest rates of up to 2,500% a year, or in the
worst case scenario, illegal loan sharks.
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