The Association of British Credit Unions (ABCUL) is backing proposals for a link up between credit unions and the Post Office 11,500 branch network, to bring credit union services within the grasp of many more people - and keep them out of the clutches of loan sharks.

The link up would allow Post Office customers to join a credit union and existing credit union members to get easier access to their accounts. As part of a range of credit union services, staff at Post Offices would be able give instant, pre-approved loans, giving people another trusted way to access more affordable credit.

The association also welcomes the Office of Fair Trading stepping up a campaign to warn people of the dangers of loan sharks, who charge exorbitant interest rates and often use threats and violence to enforce debts.

They are known for preying on people who struggle to get loans from traditional banks. Often people take out small loans to cover unexpected costs or to tie them over until their next pay check, but with sky-high interest rates debts soon spiral out of control.

Never borrow from a loan shark. If you need to borrow money or are struggling under the weight of your debts, you are advised to see your local credit union or seek debt advice from organisations like the National Debtline, the Consumer Credit Counselling Service or the UK Insolvency Helpline (0800 074 6918). Don't be embarrassed if you've run up huge debts - seek help before it gets any worse.

As part of the OFT's campaign against loan sharks, 200,000 leaflets and posters will be handed out to warn people of the danger of borrowing money from illegal lenders.

The campaign is aimed in particular at households in Scotland, the North of England and the West Midlands, home to about about half the 165,000 households in Britain who borrow cash from loan sharks.

"Unlicensed loan sharks will often offer cash loans without paperwork, they may take benefit or bank cards as security, and threaten or use violence to get money," said the OFT.

The regulator said its work had already helped 11,500 people and led to £31 million of illegal loans being written off, and some unlicensed money lenders are going to jail.

New laws, due to come into force later this year, will enable credit unions to reach out to many more people and help keep them out of the clutches of loan sharks. The proposed changes will help credit unions expand their coverage across the country, so that ultimately everyone has access to credit union services, no matter where they live in Britain.

* Credit unions encourage people to save what they can and to only borrow what they can afford to pay back.
* Members pay no more than 2% on the reducing balance of a loan (APR 26.8%). Many credit union loans cost no more than 1% a month on the reducing balance (APR 12.7%), which means that borrowers only pay interest for the amount of time they've had the loan.
* Credit unions help people to learn how to manage their money.
* Credit unions are authorised and regulated by the Financial Services Authority.
* Credit unions will take action to report loan sharks in their area to local authority anti-loan shark teams and trading standards, and encourage their members to do the same.

Mark Lyonette, chief executive of ABCUL, says: "Most of us need to access credit at some point and some people may feel they are forced to go down the route of borrowing from a loan shark, because they can't borrow from mainstream lenders.

"However, I would urge anyone who is considering taking out a loan to talk to their local credit union first - it could save both significant amounts of money and a great deal of distress."

Most people have access to a credit union in their community and details of local credit unions can be found on the ABCUL website or by calling ABCUL on 0161 832 3694.