Alternative to home credit firms

Home credit companies - the operations that send agents door to door to sell loans and collect payments in the most deprived areas of the country - have attracted some fresh flak this week. The Competition Commission says that although home credit customers are generally happy with their loans and value their relationship with their agents, this service comes at a high price. The loans often incur interest exceeding 100 per cent APR.

Until now there has been no real alternative. The high street banks have no interest in such customers, and the government-run Social Fund caps lending to an individual at £1,000, and rejects many applications.

But a charitable group in Sheffield may have come up with a solution. Individuals and companies are being asked to 'invest' their money in the Sheffield Investment Bond, which will repay their capital in five years time. The interest generated will be used to provide advice, counselling and loans at reasonable interest rates. If the scheme is successful, it could be adopted throughout the country.

· Call freephone 0800 652 8776; or e-mail: info@sheffieldbond.org.