Five questions about: Credit unions

 

Simon Read
Friday 10 May 2013 13:22 EDT
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What are credit unions?

They are mutual organisations, usually based in local communities or workplaces, which offer savings and loans to their members.

Doesn't sound very interesting. Why are they in the news this week?

Because 31 credit unions, including Voyager Alliance which serves the passenger transport industry, have signed up to a £35.6m government scheme which could help them take on expensive payday lenders and banks that refuse to deal with vulnerable people.

What makes credit unions different?

They don't make massive profits out of hard-up folk. Loans are at low rates and they encourage people to save and help them budget. In short, they are local people helping their neighbours or workmates.

That sounds a great idea. Why haven't I heard about them before?

That's why there's a new campaign. It hopes to encourage a million more people to join credit unions rather than turn to expensive payday lenders.

What else does the campaign hope to achieve?

It's bringing credit unions together to share expertise and core tasks. That'll reduce costs, producing savings >that can be passed on to members. That's good news for all!

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