Category Archives: Financial inclusion

Global credit union movement surpasses 260 million

The World Council of Credit Unions has released its latest report, which shows the continued growth of credit union membership around the world, surpassing 260 million members in 117 countries. This is an increase from its 2016 report, which showed membership of 235 million members in 109 countries.

WOCCU logoThe most notable changes from the end of 2013 to 2017 are 12 million new members in the US, 11 million each in Latin America and Africa, 7 million in Asia and one million in Europe.

“This year we can celebrate as a global community. We have realized our vision of reaching 250 million members by the year 2020,” said Brian Branch, World Council president and CEO. “We see that membership growth continues to reflect the important role that credit unions have in providing economic empowerment to people worldwide.

“The three primary challenges we hear from credit unions everywhere are advocacy, disruptive technology and membership growth. For 2019, we will launch the logical next step and take on the second global challenge, which is disruptive technology. We are gearing our efforts toward digitization, including access to core services by online and mobile channels, automation of internal processes and connection to local payments and electronic ecosystems. If we want to continue growing and competing in tomorrow’s disruptive markets, we take on this challenge, make it our own and market the advantage to serve the under-served.”

The World Council of Credit Unions is the global trade association and development platform for credit unions. It promotes the sustainable development of credit unions and other financial co-operatives around the world to empower people through access to high quality and affordable financial services.

World Council reports data based on country responses to its annual survey and does not make estimates for non-reporting countries. The Statistical Report provides the most comprehensive data on the global credit union movement available and is cited widely by governments, international institutions and analysts as an expert resource.

World Council has implemented 300+ technical assistance programs in 89 countries. Worldwide, 89,026 credit unions in 117 countries serve 260 million people. Learn more about World Council’s impact around the world at www.woccu.org.

ABCUL launches Work Not Worry social media campaign

ABCUL – the Association of British Credit Unions – has launched a social media campaign, Work Not Worry, to raise awareness of the benefits of partnerships with credit unions among employers and to encourage more employers to establish new relationships with their local credit union.

Evidence suggests that financial stress costs the UK economy £121bn (Neyber 2016) and 30% of employees are making uninformed financial decisions about saving and spending (CIPD, 2017). 26% of working age adults in the UK have no savings and 1 in 4 workers have lost sleep over money worries (CIPD, 2017).

Work Not Worry

Credit unions offer savings and affordable loans with payments deducted from pay and, for over 30 years, employers have used the services of credit unions in their workplace. This includes household brands and institutions such as Admiral Insurance, Royal Mail, British Airways and the NHS. Research funding by Citi Foundation states that 70% of employees who take advantage of credit union partnerships feel more financially capable and better supported and 83% of employer partnerships demonstrate Corporate Social Responsibility to staff by providing a material benefit at little or no cost to them.

A majority of employers say working with credit unions improves the financial capability of staff and thus helps create a more productive and better supported workforce.  This is backed by Money Advice Service research on employer best practices on financial challenges and their impact in the workplace, which states that 59% of employees with current financial worries say money concerns prevent them from performing their best at work.

A lack of savings is a major problem for many workers, but credit unions’ offer Save As You Borrow  – which asks people to save a small amount while repaying their loan – and this has great benefits in creating a savings habit.  Research by the Fairbanking Foundation found that while only 26% of credit union borrowers saved regularly before joining their credit union, 71% intend to save regularly after repaying their loan.

Matt Bland, Head of Policy & Communications at ABCUL, said: “In our conversations with employers, it is clear that many are not aware of the financial difficulties facing their staff.  Those that are have sadly seen it became a serious issue in the workplace before they had chance to respond. We regularly hear horror stories of people falling into a downward cycle of repeated and escalating payday loans.

“Credit unions have a proved track record of turning borrowers into savers. Research such as the Save As You Borrow report proves that credit unions are playing a vital role in helping their members become financially responsible. The report shows that credit unions turn 71% of borrowers into savers and that 96% of employees that are encouraged to use payroll deduction through the credit union have found it helpful.

“All employers have to do once a partnership is set up is spend a couple of minutes making the deductions each pay day – one file transfer, one payment. All employees have to do is agree to a deduction of their choice per month – and it comes directly from their salary, making life easy for everyone.”

The campaign runs for four weeks from 9 July – 3 August. For more information about the campaign and to search for a credit union partnership, visit http://worknotworry.org/

Credit union marks Armed Forces Day with Forces Finance commitment

London Mutual Credit Union launches a dedicated new financial support service for the armed forces on this year’s Armed Forces Day (Saturday 30th June).

Forces Finance PhotoSince first partnering with the Ministry of Defence in 2015, London Mutual Credit Union has provided £2 million worth of loans to over 1000 armed forces personnel, saving them an estimated £1.3 million compared to the cost of high street lenders and various payday lenders such as Wonga.

The new Forces Finance initiative will give serving members of the armed forces and their families access to a range of specially developed financial services which meet the unique requirements of armed forces personnel.

London Mutual Credit Union is a financial co-operative that exists for the benefit of its members who live and/or work in the London boroughs of Southwark, Lambeth, Westminster or Camden, and serving members of the British Armed Forces. Established in 1982, London Mutual Credit Union has over 28,000 member-owners.

Historically, service personnel have encountered difficulties accessing credit and other financial services, due in part to moving regularly and not being able to build up a good credit rating. Some have also been targeted by payday loan companies.

Lucky Chandrasekera, Chief Executive of London Mutual Credit Union, says: “Our figures show the clear demand for financial services built around the specific needs of armed forces personnel and their families. The disruptive and often highly mobile nature of life in the services can make financial planning difficult for many service personnel, as well as making it harder to build an address history or a strong credit record.”

Unlike banks, credit unions are owned by their borrowers and savers and serve a specific community. This enables them to offer advantageous rates, products and terms tailored to the specific circumstances of their members.

Lucky adds: “The launch of the Forces Finance service is designed to build on our experience of working with armed services personnel over the past three years and underscores our commitment to delivering a bank built around ‘serving those who serve’.”

In the months ahead, the credit union will work with its 1000 members who are in the armed forces to design new financial products and member benefits built around the needs and realities of forces life.

In addition, on this year’s Armed Forces Day the credit union will launch a dedicated website and large scale marketing campaign designed to reach serving members of the armed forces.

Nine out of ten members rate London Capital Credit Union

Eight in ten credit union members nationally are satisfied with the services offered, while in north London, London Capital Credit Union sees nine out of ten members rating its financial services as ‘very high’.

LCCU logo

The largest ever survey of credit union customers, published by Financial Inclusion Centre, found that 81% of members across the country were extremely satisfied or very satisfied with their credit union, while 84% said they would recommend a friend or family member. This compares to a recent Which? survey showing that mainstream banks’ average overall customer satisfaction score was only 68%.

Islington-based London Capital Credit Union is one of the largest and fastest growing credit unions in the capital, with over 15,000 members and outstanding lending of nearly £12 million. As a not-for-profit co-operative, London Capital Credit Union provides savings and low cost loans to people living, working or studying in Barnet, Camden, City of London, Hackney, Haringey and Islington.

Financial Inclusion Centre research also demonstrated just how important the broad range of financial services being delivered by these not-for-profit financial providers are, with the majority of respondents using their credit union as an affordable and fair source of borrowing – giving them an invaluable alternative to high-cost credit such as payday loans, rent-to-own firms and door-step lenders.

Credit unions work hard to help their members understand financial issues and members are shown to score well compared to the general population on a range of financial capability measures, saying they feel they have their finances under control and are confident in dealing with money matters.

Martin Groombridge, Chief Executive of London Capital Credit Union, said: “The findings of the largest ever credit union customer satisfaction survey back up what we see at London Capital Credit Union and show that most members are extremely satisfied with the services provided.

“With the current pressures on household finances, credit unions such as ours provide an essential lifeline for many, offering affordable loans in time of need and supporting people to develop a saving habit. At London Capital Credit Union, we believe it is important to help people make the most of their finances and this survey shows the hugely positive contribution that credit unions make to our communities.”

Mick McAteer, Co-Director of Financial Inclusion Centre, added: “These results are very encouraging and go to show that credit unions are highly regarded by those that use them, with higher satisfaction rates than mainstream banks.”

 A copy of the report, ‘An Insight into Credit Union Membership’, can be found here.

Credit union calls for volunteers

London Capital Credit Union is looking for volunteers to help deal with the ever increasing number of member enquiries.

Volunteering graphic

The credit union is a not for profit savings and loans co-operative based near Archway tube station in London, which is dedicated to encouraging people to save rather than borrow, while also providing low cost loans when needed. They are looking for additional volunteers to help their busy team assist with enquiries from members.

Volunteers need to have certain skills and capabilities, including being good with numbers, competent in basic spoken English, honest, reliable, friendly and outgoing. In return, the credit union will provide experience and training including in customer service, effective telephone use, using computers and different software packages and effective office management.

Volunteering with the credit union can provide many benefits, including a ‘feel good factor’ of knowing you are helping people, excellent work experience in financial services, experience of working in a busy commercial environment and access to training and improved employment opportunities.

Martin Groombridge, London Capital Credit Union Chief Executive, said: “As a financial co-operative, which is owned and run by our members, the credit union relies on the support and dedication of a team of volunteers working alongside our small staff of paid employees. A number of additional volunteers are now being sought to assist with the increase in our business as we help more and more people manage their money.

“Although the positions are unpaid, they offer several benefits, including meeting new people and making friends while working in a supportive and friendly team, gaining direct experience of the financial services industry, strengthening your CV and helping to benefit the community.”

To find out more about volunteering with the credit union click here, or call them on 020 7561 1786 for an informal, no obligation discussion.

International Credit Union Day theme announced

ICU_Day_2017_Logo_EN-page-001 - CopyThis year’s International Credit Union Day, which takes place on 19 October 2017, will have the theme “Dreams Thrive Here.”

International Credit Union Day takes place every year on the third Thursday in October and, this year, credit union professionals decided the theme via an online poll.

All 56,000 credit unions around the world are being encouraged to share photos, events and experiences online to help promote the movement. The day aims to raise awareness of the contribution that credit unions make to society.

Brian Branch, President and Chief Executive of the World Council of Credit Unions (WOCCU), said: “ICU Day gives us an opportunity to encourage credit union members to get engaged, share their experiences and celebrate how credit unions and financial co-operatives have made an impact on their life choices.”

Read more about this year’s International Credit Union Day. To find out about credit unions in the UK, visit the Association of British Credit Unions (ABCUL).

London Capital Credit Union reports record growth

Members who went along to London Capital Credit Union’s AGM heard how the credit union has continued to grow rapidly and that 2015-16 was another record year.

LCCU logoIn the financial year 2015-16, the credit union’s membership increased by 19%, savings by 22% and loan balances by a huge 30%.

The AGM, which was held at the UNISON Centre in London on 2 February, saw a fantastic turnout of 148 members who found out how their credit union had performed over the past year and its plans for the future. At the meeting, members agreed an increase in the credit union loan interest rebate and Young Savers Account interest from 0.75% to 1% while maintaining dividend on savings at 0.75%.

Helen Baron, Director and President of London Capital Credit Union, said: “London Capital Credit Union is one of the fastest growing credit unions in Britain. We now have some 15,000 members who between them have more than £10 million in savings. In 2015-16 we gave out over 5,700 loans to a value of nearly £8 million.

“The last twelve months or so have been very exciting for the credit union as we work to meet our social goals as well as providing fair and affordable financial services. We were one of the first financial institutions in the UK to sign up to the Women in Finance Charter; we became an accredited London Living Wage employer and the Fairbanking Foundation charity awarded its first 5 star mark to us for our ‘Saver Loan’ and ‘Instant Saver Loan’ products.

“We continue to focus on providing first class customer service and our annual member survey continues to show high levels of overall member satisfaction. This is borne out by the fact that much of our growth comes through personal recommendation.

“We look forward to continuing to offer a range of fair and flexible financial solutions which meet the needs of all members of our community – whether that is loans provided at a reasonable rate of interest, the promotion of thrift through the accumulation of savings or education in the wise use of money.”

London Capital Credit Union was established in 1962, and provides services for anyone living, working or studying in Barnet, Camden, City of London, Hackney, Haringey or Islington, as well as any member of Unite the Union or UNISON in Greater London, any member of The Co-operative Group South East Region and the employees of many other local and national organisations.

Credit unions can help solve poverty

A major new report on tackling poverty in the UK has highlighted the role that credit unions can play.

We Can Solve Poverty in the UK Report

The report, We can solve poverty in the UK, from research charity the Joseph Rowntree Foundation (JRF) offers a plan to end poverty in this country by 2030. It is the most comprehensive strategy of its kind to set out how to solve poverty across all groups in the UK, calling for a new ‘long term deal’ to solve poverty between governments, business and the public.

A role for credit unions is identified in providing fair and affordable access to credit, as well as in helping people to save, budget and avoid problem debt.

The strategy encourages employers to provide – and promote the take-up of – credit union membership as a staff benefit to promote saving and access to affordable credit, highlighting the ease with which employees can save and repay loans direct from payroll. It also calls for the expansion of credit unions’ capacity to provide affordable credit through support from employers, local government and social investors.

The report recommends that tackling poverty should be an explicit aim in social landlords’ business plans and strategies, arguing that: “Housing associations could play a role in delivering affordable credit to their tenants, as part of a wider financial inclusion strategy, working with credit unions where possible.”

Launching the strategy, JRF Chief Executive Julia Unwin said: “Poverty divides communities and generations; it harms people’s potential and strains families; it drains the public purse and holds back our economy. The Prime Minister has made a promise to make Britain work for everyone and reform capitalism. As Westminster reconvenes this week, I urge her to deliver on this promise.”

To mark the launch of this significant strategy, JRF has teamed up with Big Society Capital to work towards raising up to £20m of social investment to tackle the ‘poverty premium’, whereby people on low incomes pay more for goods and services including credit and financial products. The initiative will support charities and social enterprises to develop solutions.

Mark Lyonette, Chief Executive of the Association of British Credit Unions Limited (ABCUL), said: “We welcome the JRF’s recognition of the role credit unions play in helping alleviate hardship and poverty. Credit unions are proud to serve people from all walks of life, which includes those who may struggle to access credit and financial services from other providers. The expansion and modernisation of Britain’s credit union movement will make us even better equipped to provide services to people right across our communities.”

 

Credit union calls for volunteers to help with soaring demand

LCCU logoLondon Capital Credit Union in Islington is looking for volunteers in the run up to Christmas as it deals with rocketing demand for its services. The credit union saw its membership increase by 10% in September alone.

This follows a recent call by Sir Hector Sants, the former Chief Executive of the Financial Services Authority, who now heads up the Church of England’s taskforce on credit unions, asking people with a professional background to consider volunteering for a credit union or standing for election to the board, in order that credit unions can benefit from a wide range of expertise and ability.

Martin Groombridge, Chief Executive of London Capital Credit Union, says: “We are experiencing a high level of demand for our services at the moment, and this is likely to increase further in the run up to Christmas – our busiest time of year. So we are looking for people with a wide range of skills to donate some of their time to help us.”

As financial co-operatives, credit unions are owned and controlled by their members and rely on local volunteers to help deliver their services to the community.

“Our volunteers get involved with the day-to-day running of the credit union,” explains Martin Groombridge. “Duties include customer services, handling phone enquiries, processing membership applications, helping to maintain our database and working on marketing materials.”

Sir Hector also called for more people to deposit money with a credit union – money which can then be lent out at an affordable rate of interest to help those in need. Those who save with a credit union then qualify for a share in the profits of the credit union in the form of an annual dividend.

Sir Hector’s comments came as the Church of England rolls out its programme to provide financial support through its new Credit Champions network across 2,000 churches. The initiative encourages church congregations to promote saving as an alternative to borrowing and to raise awareness of the role of credit unions in providing low cost loans in times of need. London Capital Credit Union is working with a number of churches across North London as part of the scheme.

London Capital Credit Union receives highest Fairbanking Mark from The Fairbanking Foundation

The Fairbanking Foundation – the not-for-profit charity dedicated to encouraging banking institutions to improve the financial well-being of their customers – has awarded its first Mark certifications to credit unions with London Capital Credit Union receiving 5 stars for its personal loan products.

London Capital Credit Union had to demonstrate that its personal loan customers have experienced a tangible positive impact on their financial wellbeing from using their products.

Martin Groombridge

Martin Groombridge

Speaking about the award of the 5 star mark, Martin Groombridge, CEO, London Capital Credit Union, said: “Our focus is always on our members, which is why 76% of our personal loan customers interviewed by the Foundation said that they had one or more other products with us. It is not just about offering competitive and transparent products, but also a range of features and services that help people manage their money better.

“Many in the financial services industry are too obsessed with getting into best-buy tables, but to do this transparency can often be lost with many products offering short term “teaser rates” that can quickly get expensive. People with these products can end up worse off than if they chose another product that takes a more holistic approach to helping customers with their money.”

Fairbanking’s assessment also reviews the provider’s complaints procedures and experience for the product in question. Antony Elliott, Chief Executive of Fairbanking Foundation said: “Our quality mark programme is an important step in helping customers to identify products that have been rigorously tested for the financial well-being they can deliver. Crucially, it also provides a powerful incentive for financial institutions of all sizes to compete through continual improvement of their products in ways that will truly benefit their customers.”

Over the last ten years, London Capital Credit Union has seen a 1,400% increase in members’ savings from £436,000 to over £6 million. And as co-operative, London Capital Credit Union is owned and controlled by its members – not outside shareholders.

Find out more at www.credit-union.coop.