Thirty one credit unions have signed up to a major new project that is set to transform the credit union sector over the next two years.
The ambitious Credit Union Expansion Project is being managed by the Association of British Credit Unions Ltd (ABCUL) and aims to attract up to a million more people into credit union membership. The Government has agreed to invest £35.6 million in the sector, which could save consumers up to £1 billion in loan interest repayments.
The first wave of 31 credit unions to join up has now been announced and includes many larger and fast growing credit unions. Over the next few months, many more credit unions will follow suit, allowing even more credit union members to benefit from the scheme. Credit unions are expected to serve an extra one million members within five years.
Mark Lyonette, Chief Executive of ABCUL, said: “We will be supporting credit unions to offer a much wider range of great value products to many more members from a broad range of income groups.
“Consumers will soon be able to benefit from the latest online technology to sign up to credit union services such as current accounts, budgeting accounts and Cash ISAs. A centralised hub will automate the delivery of products so that members can also access credit union services through secure connections to other networks. It is hoped that this will include the Post Office network.
“Credit unions will retain their local status and community focus, but work together where they can benefit from pooling knowledge and resources. This will give members the best of both worlds.”
Because core tasks will be centralised, credit unions will benefit from economies of scale which they will be able to pass onto members through lower loan rates and better returns on savings. They will also be able to focus on providing the excellent service to members that they pride themselves on.
The sector will also research what people want from credit unions and work with employers and other community leaders to help more people access the services they need.
Mark Lyonette added: “This is a landmark project for credit unions and a once-in-a-lifetime opportunity which will help to place the credit union movement in Britain on a similar footing to leading credit union movements around the world.”
Credit unions have welcomed the project and the benefits it will bring to their members.
Barry Duggan, Manager of Voyager Alliance Credit Union, which serves the passenger transport industry in England, Scotland and Wales, said: “We are really pleased to have been selected as one of the first wave of credit unions to join the project. Our credit union has always tried to stay at the forefront of new developments and new technologies – for example we were one of the first to introduce the Credit Union Current Account – and this scheme will help us to grow further and offer more and better services to our members. It is an exciting time for the credit union movement and we are looking forward to the opportunities and challenges ahead.”
Vincent Thomas, Chair of London Plus Credit Union, said: “This inspirational project will help us to reduce costs and expand our product range as well as helping us to provide the fast and efficient services people expect these days. As well as being better able to compete with less ethical lenders, it will allow us to offer services to the whole community – not just those on lower incomes. We are delighted to be part of the project and we are looking forward to the improvements it will bring for members.”