What are Credit Unions?

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03 Jun What are Credit Unions?

Credit Unions humble beginnings stemmed from small, non-profit financial organisations set up by members with something in common to benefit their community. Over the years, credit unions have professionalised, in which many now offer products online and have acquired commercial premises. Their key aim is to provide a financial community in which members mutually benefit as there’s no profit for third-party shareholders.

There are now about 500 credit unions in the UK and come in all shapes and sizes. There are approximately a million credit union members and this is increasing year on year.

Credit Unions come in all shapes and sizes, from dealing with a few hundred members in a small community to large city unions with tens of thousands of members. Credit Unions provide their members with ethical, community-run savings and loan facilities that work like a high street bank.

What can a Credit Union can do for me?

Credit Unions can offer a number of different services depending, from simple savings accounts, Visa cards, short term loans to mortgages and car loans. They differ from high street banks in that they are run by the community for the benefit of all in that community. They are not there to make huge amounts of profit of your savings; they are there to provide everyone a safe place to save your money.

Credit Unions aim for 100% financial inclusion within their respective communities. You may ask so what does this mean for me? Well if you have struggled to get an account with a high street bank, or to find a better alternative to payday loans or doorstep lending, then the credit union is there for you. Credit unions aren’t just an oasis for those struggling financially; as community co-operatives, they can also appeal to those who want to benefit their neighbours.

Credit Unions aim to end financial exclusion in the UK by providing the facilities for anyone to set up a membership with a credit union, no matter what your history is.

What the future holds for Credit Unions?

2015 is going to be an interesting year for UK Credit Unions. They have received backing and investment from the government in order to bring their systems up to date, this way they hope to compete with the big banks.