As the mortgage and credit drought worsens, the government is desperately trying to look as though it is doing something to ease people's burden. The government announced today, via the BBC, that it will unveil an initiative to help people, eg those on low wages, beat the credit crunch by relaxing the rules on credit unions.
Credit unions are community based savings and loans organisations. They act as low-risk savings and loans providers, usually for the less well-off.
It is an ugly fact of financial life that those most in debt, and least able to borrow more, are at the greatest risk from loan sharks.
Currently any area or organisation can form a credit union; however, they have to operate within their own communities (the Common Bond). The Treasury will broaden the Common Bond, allowing the sector to expand.
The government envisages that by this time next year, people will be able to access cheap, secure loans.
All very well, but the need for low cost credit and an easing of cashflow is now; not in one year's time.
The loan sharks are going to feast themselves sick over the coming months, on the rotting corpses left behind by the government's mismanagement of this crisis.