Ethos Public Relations Manchester

Collaboration is key to success for credit unions

by Ethos public relations

New research launched today, reveals that credit unions must work together and in partnership with a wide range of public and private sector organisations in order to fulfil their potential and reach all those who need their help.

Community finance for London - scaling up the credit union and social finance sector, is a major new strategic piece of research which examines how to develop affordable financial services in Greater London. The report was developed by Paul Jones of the Research Unit for Financial Inclusion at Liverpool John Moores University with Anna Ellison of Policis, and was funded by Santander. It is designed as a blueprint for the credit union and social finance sector and it demonstrates the important role of credit unions in enhancing the social and economic cohesion of communities.

Speaking at the launch in the Houses of Parliament, Paul Jones said: “The credit union sector needs to modernise and to achieve sufficient scale in order to offer affordable financial services to a wide range of households on low and modest incomes. However, it also needs to maintain the community finance ethos and vision that defines and differentiates it from the mainstream.

“The report explores the fit between the need for affordable financial services and the capacity of community finance in London. It investigates the nature of the challenges facing the sector in scaling up to meet demand and it reveals how credit unions are strengthening the social and economic cohesion of local neighbourhoods and communities.”

Rob Hailey, Senior Public Policy Manager at Santander UK plc, said: “We are delighted to support this important piece of research into the community finance sector. Though focused on London, many of its recommendations will be relevant for credit unions and others across the country. We hope it will contribute to the strengthening of the sector and ultimately to reducing financial exclusion.”

The report describes a vision of credit unions and social lenders working in partnership with central government, local authorities, social housing providers, money advice agencies and other locally-based organisations, to provide quality and competitive financial services at affordable rates whilst actively contributing to local social and economic development.

Credit union membership in London has grown by over 90 per cent since 2005. Now, everyone who lives or works in 27 out of the 33 London boroughs can join a credit union, and there are plans to expand into two more boroughs in the near future. However, despite this success, credit unions and the social finance sector in general, still lack the capacity and the reach to extend their services to the many more low and moderate income Londoners who could stand to benefit from access to affordable financial services.

Mark Lyonette, Chief Executive of ABCUL, said: “This timely report sets out a route map for the development of the credit union sector in Britain.

“Credit unions in this country are on the threshold of a major expansion, with new legislation in the coming months freeing up the sector to serve more people with a wider range of services. However, as this study shows, for credit unions to really fulfil their potential and reach all those in need of their help they must work together and with other agencies to achieve the scale and quality of services required.”

The study was funded by Santander as part of its work to support the community finance sector. The bank is also providing a £100,000 investment into a new credit assessment system for credit unions, being planned by the Association of British Credit Unions Ltd in partnership with Experian. The new system will play an important part in the development of credit union back office services in Britain.

To download the report go to: www.abcul.coop/media-and-research/research/london-community-finance-report.

To read other news from ABCUL click here.

Posted at 12^th July 2011