A £6,000 project to assess whether there is a demand in Wyre Forest for a scheme which provides financial services for people frozen out by normal banks is underway.

Credit unions - member-owned, self-help institutions - already operate in Bromsgrove, Redditch and Worcester. District council officers want to find out if there is a demand for the service in Wyre Forest.

The unions are not-for-profit organisations, run on a co-operative basis and intended to help disadvantaged individuals and communities.

One option being considered for Wyre Forest, if enough interest is generated, is to be part of a potentially merged credit union covering either the whole of Worcestershire or north Worcestershire.

Steve Singleton, economic development officer with Wyre Forest District Council, is co-ordinating the fact-finding exercise, which has been made possible by funding becoming available.

He said: "A credit union is an organisation which provides low-cost loans and, at the same time, the ability to save as well, away from - often - the financial constraints of having a bank account and going through a bank system.

"Also, it enables you to take out loans without going through occasionally high interest from lenders.

"It's not free money but it's a way of borrowing money without having to pay the high interest."

He added: "The district has generally supported the principle but hasn't been able to fund the development work until fairly recently.

"Without that developmental work going on, I don't think this district will be able to plug into it," he added.

The assessment project is expected to last six months. It is being paid for with contributions from Wyre Forest Community Safety Partnership, Wyre Forest Community Housing and Opportunity Bewdley.

There are an estimated 100 credit unions throughout the UK, with around 525,000 members and total assets of more than £500 million.