GLASGOW city council is guaranteeing that every young Glaswegian will be provided with an account at a reputable credit union.
From this August, the council will deposit £10 in a community credit union account for every new secondary school student — up to 6,000 young people every year.
This will give every young person in the city, over time, access to a responsible saving option and credible money advice.
City treasurer, councillor Paul Rooney said: “What we are doing with this project is giving every young Glaswegian that safe and secure relationship with a credit union that is responsible to its members and to its community.
“Straight away, they will start to learn about managing money and will have the opportunity to save.
“And if, years from now, they decided they need to borrow, they will also have access to a lender that knows them well and will help them — rather than simply see them as an opportunity to turn a profit.”
The move is aimed at fighting back against the rampant rise in debt to pay day lenders.
The council conducted a recent study which suggests as many as 100,000 are regularly using non-standard forms of credit which, in turn, is fuelling a city market worth more than £57 million per year.
Other actions the council are looking at are a refusal to lease any of its commercial property to pay day lenders and working with the £13 billion Strathclyde Pension Fund to ensure no direct investments are made in the trade.
The council also intends to lobby the Westminster and Holyrood governments to reform how lenders are allowed to operate.
GCC has already blocked computers using its network from accessing any pay day websites and has successfully talked some of the city’s biggest employers into following suit.
Councillor Rooney leads the cross-party group that, with the help of expert advisors, has been examining the city’s non-standard credit market since late last year.
Councillor Rooney said: “There has been some important work done at national level, but this is the most significant research anyone has done on the extent and the impact of pay day lending in one community.
“I think we all suspected that the use of these loans would be relatively high in Glasgow, but the figures are startling.
“Glaswegians borrowed more than £57 million this way in the last year — and around 100,000 adults are using some sort of non-standard credit.
“To put that in context, it is enough to fill Celtic Park and Ibrox at the same time. If you do not have a pay day loan, you know someone you know does.”