A community bank designed to help people on low incomes get out of debt now has more than 100 members and £28,000 in its pot.

A total of 120 accounts have been opened at the Oxford Credit Union giving the scheme £28,000 to be lent out.

Oxford City Council, St Peter's College and Wadham College are supporting the union by giving their employees the option of putting money into saving accounts directly when their wages are paid out.

The union, based in Cowley Community Centre, in Barn's Road, is to meet with BMW next month to discuss the plant's 5,000 employees also paying straight into the credit union via the company's payroll system.

Credit union manager Rosalba Edwards said: "I'm very pleased with the way things are moving along. It's excellent to get these employers on board. If we take the money through payroll it's easier for people to save.

"It also cuts costs at our end as we have to pay less overheads. The city council employs 1,500 people so we have a lot of potential savers there. It will be a big boost for us if we can get BMW to join us as well.

"Saving with the credit union is a way people can help those less fortunate in their community. People can fall into a cycle of debt and be trapped into borrowing from loan sharks. We are responsible lenders."

City council spokesman Louisa Dean said: "Oxford Credit Union offers all sections of the community access to savings, basic financial advice and affordable loans.

"It's owned and operated by its members who live or work in Oxford. We are making it easy for our employees to save with the union by offering direct deductions from their salary."

Union staff visit the companies during working hours to give employees the chance to sign up.

The credit union, a co-operative run for the benefit of shareholders, lends at interest rates no higher than 12.68 per cent. It costs £1 to open an account.

Helen Ward, an IT consultant, of Temple Road, Cowley, Oxford, has invested £5,000 in the union.

She said: "The union is designed for people on lower incomes who are not catered for by banks but it needs people to put money and invest in it.

"It fills a gap for people below the regular banking system and gives those people a step up.

"It provides a way of managing your savings and borrowing sensibly."

Stan Taylor, a member of the supervisory board of the union and an ethical investor in it, said: "Some people are ethical investors who want to make a one-off payment. Others are regular savers.

"The point is to have capital in the bank to lend money to people who would otherwise fall prey to loan sharks.

"I would urge people to join to help get it off the ground. Once it's established we would like to open branches in the suburbs and the city centre.

"I have always supported co-operatives generally because I think it's important that the ordinary people play a part in their community, not just as buyers and borrowers."

The union, which started in January, aims to have 500 members by the end of the year. To contact the Oxford Credit Union call 01865 777757.