Haringey Borough Council has loaned £250,000 to a credit union as part of a campaign to tackle predatory payday lenders.

Cash given to London Capital Credit Union aims to help thousands of hard-up families avoid the excessive interest rates charged by payday loans companies.

The credit union has issued more than 1,100 new loans worth nearly £1million to Haringey residents since October 2012.

People from the borough also hold nearly £900,000 in savings with the union.

Last month, the authority announced plans to give every secondary school starter a £20 savings account with the credit union to encourage children to start saving.

Councillor Joe Goldberg, cabinet member for finance, said: “We’re determined to do all we can support Haringey families facing the perfect storm of the soaring cost of living and a proliferation of legal loan sharks on our high streets.

“I’m proud that our loans have already allowed the credit union to expand its vital work in Haringey, with more members taking out loans and savings accounts here than anywhere else in London.”

Last year, Haringey Council banned the top 50 payday loan firms from its IT network in a further move to protect residents from the excessive interest rates they offer – with some charging up to £4,000 APR.

For more information, visit www.credit-union.coop or call 020 7561 1786.