Kirk start-up loans plan to help jobless

UNEMPLOYED people in some of Scotland's poorest areas could be given Church money to help them set up their own businesses as a way out of poverty.

The Church of Scotland's General Assembly was today expected to give the go-ahead for an examination of "micro credit" – offering start-up loans to individuals and groups in a bid to provide employment and boost struggling communities.

A report by the Kirk's church and society council today said it would mean the church making available a "substantial" sum to lend to people who would not qualify for loans from banks. The Rev Ian Galloway, convener of the church and society council, said: "The Church of Scotland, like other organisations, has reserves. It may be it could use some of these to invest in people in this way."

But he said there was more work to be done on how the scheme would work.

Micro credit has been pioneered in Bangladesh and among asylum seekers in New York. The biggest obstacle in this country could be the benefit system since individuals receiving cash help to start their own business would immediately lose welfare payments.

But Mr Galloway said there had also been pilot schemes in England which had included special benefit concessions.

He said: "Micro credit can be one way to help people out of poverty if there is a benefit 'holiday' so that if someone wanted to be a hairdresser, or whatever, they could continue to get benefits for a period while they establish themselves.

"And in the longer term there would be a huge saving in benefits because people would be moving into self-employment."

The report to the assembly said micro credit and similar schemes were a way of helping communities take more control of their own economic destiny.

Some Kirk congregations had already been involved in setting up credit unions. And the report suggested with the threat of post office closures, churches could house sub-post offices in their halls.

The assembly was also being asked today to back moves to set up a broad-based commission to look at ethics and economics.

Mr Galloway said people had been shocked by the collapse of the banks. He said: "Trust has to be restored, not necessarily by getting back to the way things were, but by looking how economics can be made to work for the good of all."

Should the Church of Scotland offer loans to the needy?

Alexander Alexander, 81, retired, Calder Gardens: "I don't think the Church should be doing that at all. They'd be better helping the homeless."

Sandra Deans, 59, housewife, Oxgangs: "It should be left to the government and banks."

Gordon Allan, 40, estate agent, Dalkeith Road: "If they can help people out, it's no problem."