THE county may be set for a new kind of banking to help those at the mercy of loan sharks.

Oxfordshire County Council has funded a study into setting up a credit union.

Credit unions are financial institutions owned and controlled by members.

They provide credit at a competitive rate and all the profit is returned to its members. They are often used by those who cannot get credit elsewhere.

The countywide proposal comes from Cooperative Futures, which promotes the principles of the cooperative business model, and the county council has paid them £9,000 for a feasibility study.

Andrew Lee, from Cooperative Futures, said: “There is real value in cooperatives and in people having a say in how their services are run.

“The Prime Minister has talked about the importance of credit unions on three occasions, but there isn’t one in his own constituency.”

Oxford has two credit unions, in Blackbird Leys and Cowley, but this would be the first to operate across the county.

Alison Baxter, chief executive of Oxfordshire Community and Voluntary Action, said: “Outside of the city of Oxford there are no credit unions. We are just about the only county in England that doesn’t have that kind of service.

“They can be really useful for people who struggle to take out loans and are at the mercy of doorstep lenders.” Richard Josephs runs the Oxford Credit Union in Cowley, which has more than 1,000 members.

He said: “We are very much in support of a credit union across the whole county.

“They allow ethical investments. There are no profits going to shareholders or bankers. It is run for the benefit of the community.”

Saul Goode, of the Blackbird Leys Credit Union – which stopped lending briefly last year after cuts to Government funding and a lack of new grants, but is now lending again – said: “I definitely think there is a need for them at the moment.”

Council spokesman Paul Smith said: “We await the results of studies currently being undertaken with interest.”