The country's newest credit union is launched today to help Kent people beat loan sharks.

Kent Savers Credit Union is offering services to the county's 1.6 million people - the largest coverage for any UK credit union - especially those turned off by the discredited banking system and seeking an alternative to high interest loans or pay day loans.

The scheme, unveiled at Little Pebbles Children's Centre, Gravesend, aims to show families, especially those on low incomes, that they do not have to borrow money from loan sharks or through pay day loans.

Many pay day loan companies on the Internet offer finance at extortionate interest rates, often as high as 1,000 per cent. Kent Savers will offer a wide range of accounts, including ISAs, Child Trust Funds and those with instant or limited access.

"Kent Savers is duty bound, actually legally obliged, to promote thrift and sound financial education of its membership," said chairman Ursula Wacher. "And like any membership organisation our members have a say in the way we run our business. Unlike banks, our members have a vote which actually counts."

As an independent co-operative, Kent Savers will not be handing out large bonuses to its staff but reinvesting profits in new loan schemes and ethical investment. All deposits are 100 per cent protected by the Financial Services Compensation Scheme.

John Fowler, chief officer, added: "Kent Savers is for everyone, we will have investment plans and loan rates which are competitive and we welcome people on low incomes. We have a responsibility to focus on people living in deprived areas where the benefits of the credit union can be most pronounced.

"For example, if 100 borrowers used Kent Savers instead of a doorstep loan company, the savings would be £34,000 a year. This is extra income which can either be saved or reinvested within the community. Currently there are a large number of people who are financially excluded in Kent and we want to help address this."

Kent Savers operates from offices at The Old Town Hall, Gravesend. It has received initial funding of £250,000 from Kent County Council, with a further £500,000 from other organisations.