A NEW savings and loans scheme specifically for housing association tenants has been launched by Darlington Building Society.

The Helping Hand scheme has been developed through a partnership between the society and five local and national housing associations.

Endeavour Housing Association, Home Housing Association, Guinness Trust, The Places for People Group, and Tees Valley Housing Group, which together have 11,000 tenants in the Darlington and Tees Valley areas, have all signed up.

Tenants can use their rent book or tenancy agreement to open a Helping Hand account with as little as £1.

Small loans, which are not normally available from the major banks, will be available as long as the account holder has made regular payments into the savings account for the three months before the application.

Sums from £50 to £250 will be repayable over a 12 to 24-month period at the minimum rate of interest for the Consumer Credit Act, at present only 1pc above the bank base rate.

As an example, if a tenant were to save £2.50 a week for six months, they would have a balance of £65 and would be eligible to apply for a loan of £130.

Account holders will receive the same rate of interest on a £1 balance as they would if they had £50,000 or more invested.

To get the scheme off to a flying start, the society will give an extra £1 to the first 250 account holders opening accounts of £5 or more.

The five housing associations have also invested significant time and money in the scheme, jointly providing a £50,000 guarantee fund to underwrite the society in respect of future loans which may be made.

Jan Ford, one of the first North British Housing tenants to open an account, described the scheme as "wonderful."

"Many tenants, particularly those on income support, would find it difficult to set up a bank account at all," she said. "Families who need to borrow money for a fridge or washing machine will be able to do so without resorting to money lenders who charge huge rates of interest."

Mr Peter Rowley, chief executive of Darlington Building Society, said the scheme was available through any of its 13 branches.

"Darlington Building Society is dedicated to looking after local interests and this new saving and loan scheme, developed to benefit so many local people, is a perfect example of this dedication in action," he said