A new credit union has been launched in Stoke-on-Trent to help protect vulnerable people from loan sharks and 'predatory' pay-day loan firms.

The Potters Bank, the first credit union to operate in Stoke-on-Trent in nearly 20 years, will offer low-cost loans and savings accounts to anyone who lives or works in the city.

Stoke-on-Trent City Council worked with local businessman James Adams, founder of mortgage brokerage My Simple Mortgage, to set up the credit union.

Mr Adams and council leaders believe the decline of high street banking and the cost-of-living crisis has left Stoke-on-Trent residents vulnerable to unethical and illegal lending, leaving them trapped in debt.

As well as offering banking services, the credit union will provide advice and support to help people become more financially resilient.

The Potters Bank will be operated by Just Credit Union, which already has 10,000 members across Shropshire, Herefordshire and neighbouring areas.

Members will be able to access services online, with the Potters Bank also holding sessions at Stoke-on-Trent's community lounges to allow face-to-face contact.

Karen Farrow, chief officer of Just Credit Union (image via Pete Stonier)

Mr Adams says Stoke-on-Trent's high levels of deprivation and debt have left residents particularly vulnerable to loan sharks – a problem the Potters Bank will aim to solve.

He said: "Illegal lending is often a hidden crime that's difficult to tackle. So we thought that if we can't go after the loan sharks, we'll take away their business.

"The Potters Bank branding is important because we want people in Stoke-on-Trent to feel that this is a local service for local people, that this is their bank. And the money that people save with the Potters Bank will be recirculated in the local economy."

Just Credit Union was founded in Shropshire in 2001, and currently looks after £7 million of savings, with loans worth £5 million on its books. All its savings are protected by the Financial Services Compensation Scheme.

Karen Farrow, chief officer at Just Credit Union, said: "We offer loans of up to £15,000, but most of our loans will be for around £500, when someone needs the money to fix their car or buy a new washing machine.

"We will offer a low-cost loan, but we'll also provide support to help improve their financial resilience. When they pay back their loan we'll encourage them to also pay some money into a savings account, so they get into the habit of saving.

"When people borrow from a predatory pay-day loan company, they'll be trapped just paying off the interest, and they'll never actually get out of debt."

Cllr Sarah Hill, cabinet member for finance, anti-poverty and corporate services at the city council, said: "This is great news for the city because it is all about providing low-cost, safe loans and helping people avoid the trap of dangerous debt.

"It's also about helping those people who most need support and sits alongside the wide-ranging help we provide to combat the cost-of-living crisis through campaigns such as Help is at Hand."

For more information, visit the Potters Bank website here.