Traditionally Credit Unions are non-profit organisations set up to by their members to offer a benefit to their local community. They are a ‘union’, by definition being a collective of members.
These days Credit Unions may serve a particular sector of industry, a type of demographic or a geographic community.
Most unions now operate from commercial premises, they offer savings and loans to their members.
They tend to lend smaller amounts of money, normally from £50 to £3,000 but some now offer mortgages and different types of lending.
The Growth of UK Credit Unions
Contrary to popular opinion, the number of unions has been growing consistently since 2004. Since this time Credit Unions have doubled in number, membership is up 84%, loans up by 93% and savings up by 111%. (according to ABCUL)
Credit Unions are not a product of the recession, their popularity has been steadily increasing over time.
Who Uses Credit Unions?
Contrary to popular opinion, Credit Unions are not just for low income households or those with poor credit records.
Credit Unions attract customers who are looking for an alternative place to either save or borrow. Customers could be looking for a more ethically sound place to save or borrow, or may want to do something because it benefits their respective community.
The Police, NHS and Transport sectors all have their own dedicated Credit Union.
Can I Join A Credit Union
Since 2012 the rules surrounding who can join a Credit Union have been relaxed. The basics are that you need to share a common bond with the other people within that union.
This bond could be living in the same area, being part of the same church, working within the same sector etc.
Credit Unions are not commercial institutions, they are a union of people with a common interest.
Where Is My Local Credit Union?
Have a look at this site to find your local Credit Union. There are more and more unions all over the UK. Remember that they are used by both savers and borrowers and often offer a more ethical or community focused alternative to standard finance companies.
By Dave Farmer