Credit unions help financially excluded Brits
Credit unions are helping those excluded from mainstream finances.
Members of the organisations often come from the poorest sections of society, and from groups without access to many financial products.
But research from the Association of British Credit Unions Limited (Abcul) shows after joining the co-operatives, the majority of people who had used expensive doorstep loans before they joined a credit union had stopped or reduced their reliance on these expensive products afterwards.
Credit unions are owned and run by their members, offering savings and loans. Each union has a "common bond" which determines who can join it; this might be based on where people live or work or for members of the same church or trade union.
The new Abcul report shows that credit union members are more likely to have used doorstep loans, less likely to have a bank account, and more likely to be on low incomes and living in social housing than the rest of the UK population.
However, the presence of the unions helped many members improve their financial situation.
Of the people that had used doorstep loans at some point, 41 per cent have stopped using home credit as a direct result of joining a credit union, while a further 16 per cent have used home credit less since becoming a member.
And credit unions are also being used as a savings vehicle by people who save nowhere else.
Some 46 per cent of credit union members living in low-income households (on £200 or less a week) say their credit union account is their only way of saving.
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