With increasing concern about the way high street banks are being run, the uncertain state of the Cooperative Bank and the rise of pay-day loan companies, Credit Unions could be an alternative way of shaking up the banking establishment.
Credit unions are financial co-operatives owned and controlled by their members. Each credit union has a “common bond” which determines who can become a member of the credit union. The common bond may be for people living or working in the same area, people working for the same employer or people who belong to the same association, such as a church or trade union.
Credit Unions are authorised and regulated by the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA) and all money saved in a credit union is protected by the Financial Services Compensation Scheme (FSCS) up to a total of £85,000 per member. In the UK, credit unions started in the early sixties and now have almost one million members.
For example, South Manchester Credit Union formed in 2000 and its membership has grown to almost 3000, with shares in excess of £1.33 million and a loan book of £1.31 million. Services, including membership applications, are now available through an online secure members’ area as well as at the office on Fog Lane in Burnage. A dividend of 1.25% has been paid on shares for the last 3 years and a range of loans products are available to assist both those with poor credit histories and those with a good credit rating. South Manchester Credit Union offers an ethical and affordable alternative to high interest lenders as well as providing a socially useful option for savers who live or work in south Manchester. Click here to visit their website.
Why not find out more about a Credit Union in your area and support an alternative form of ethical lending and investment?Please note that these comments do not constitute advice. Information provided by South Manchester Credit Union.