At my last session I discussed the history of credit unions and below is a summary of their origin in the UK and the important part, they played and still play in our community.
‘In 1964, a group of British-Caribbean’s did something historical – they set up the first credit union in Britain, the Hornsey Co-operative Credit Union. This was a reaction against discrimination by the banks, that often-charged Caribbean’s higher interest rates and required them to pay larger deposits for loans to buy houses and flats.
To tackle this problem, 10 pioneers from the Ferme Park Baptist church imported a model of banking that was widespread in their countries of origin – the credit union.
A credit union is a bank fully owned and governed by their members as a cooperative, with each member having one vote in electing the board of directors.
The first year saw 200 members join, and soon the credit union had grown to become the flagship of a booming movement. By 1974 Britain had 48 credit unions with 39,000 members, around two-thirds of whom were of West Indian origin.
Alongside basic financial services, these institutions provide financial education and advice to their members to help them live a life more aligned with Christian virtues, like frugality. Strong community ties, often forged through faith, strengthened the credit unions, as members knew each other and felt a moral obligation to pay their loans as it was their neighbours and friends who had to cover the losses if they didn’t. In a virtuous cycle, the credit unions in turn also strengthened community ties – instead of people using banks that enriched a few wealthy shareholders, they could save and lend their money in a way that kept it circulating in their own community.
The UK credit union has seen rapid growth ever since its inception – by 1998 the overall
membership had reached 220,000, with 38% of British-Caribbean adults being members. In
2008, the membership had grown to 650,000 and in 2018 it reached 2 million.’
Source: LEO SAMMALLAHTI ON MARCH 11, 2020
Despite this history it has come as a surprise to me that many people are still unaware of Credit Unions and the services they provide. It is even more significant that in relation to data
from the Financial Resilience Task force 2019 has shown that 11.5 million people have less
than £100 in savings and 12.5 million people have little or no confidence in their ability to manage their money. One of the many benefits of the Credit Union is the fact that they encourage people to save.
Below is a quick guide to Credit Unions and how to join.
Why use a credit union
· They encourage its members to save regularly
· they provide loans to members at low rates of interest
· they provide members with help and support to manage their money
· they are a not-for-profit organisation
If you have found it difficult to open an account with a bank or building society, a credit union current account may be a good option for you.
Who can join a credit union?
People who join a credit union must belong to what is called a common bond. This means that either:
· you live in a specific area,
· you work for a particular employer
· you are a member of a club or association.
Are Credit Unions safe?
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. This means that Credit Unions offer the same level of protection for your money as any UK bank or building society!
For those who live in Croydon your local credit union is CroydonPlus.
Croydon Plus credit union was established in 1999 as Croydon Savers Credit Union Ltd and was initially a credit union made up of Croydon Council staff. Over the years Croydon Savers expanded to cover Merton and Sutton boroughs.
To join CroydonPlus you must be:
- 16 and over and
· live, work or study in either Croydon, Merton or Sutton
You can find out more information or join online by visiting: www.croydonplus.co.uk
Many thanks to the CEO Michael Wilson who attended our recent Black history month Event and was on hand to answer questions raised by participants and shared useful information.
To those of you who joined Croydon Plus after the recent event well done and happy saving!!!!