Tag Archives: Credit unions

City investors urged to help tackle illegal loan sharks

One of the country’s leading credit unions is urging City investors to invest in a deferred share scheme which aims to tackle the issue of loan sharks and illegal money lending head on.

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London Capital Credit Union based in Archway, which exists to help its members save and to lend them money when needed at reasonable interest rates so they can steer clear of payday lenders and loan sharks, is looking to expand.

Says Martin Groombridge, Chief Executive of the Credit Union: “We aim to raise £125,000 to £150,000 in additional capital through an issue of deferred shares. This will allow the continuing expansion of our lending as an alternative to loan sharks and other high cost credit providers. A social investment in deferred shares will have a significant positive impact on the communities that we serve, including those in the City’s poorest neighbourhoods.”

For some sections of the community, including the ‘working poor’, there are very few opportunities to access affordable credit. That’s where credit unions come in.

Regulated by the FCA and PRA, credit unions in the UK tend to operate in those areas of the market not well served by mainstream financial institutions. As members’ incomes are usually lower than average, a credit union’s main competitors are likely to be niche players offering high-interest loans to those with poor credit profiles.

London Capital Credit Union is a financial co-operative, owned and controlled by its members and providing financial services to communities across London. One of the country’s fastest growing credit unions, it has gone from 675 members and £493,000 on loan in 2008 to over 15,000 members and over £10.8m on loan at the end of 2018.

The Credit Union plays a significant role in alleviating poverty (as the Joseph Rowntree Foundation has identified) and has an ambitious expansion programme. It is looking to extend its services to tens of thousands more people, so as to reduce financial exclusion and the level of poverty in the community.

Social and financial impact

Increased use of credit unions could have a real impact on local communities. Analysts from a well-known City institution performed an assessment of the social and financial impact of London Capital Credit Union and concluded that, on average, for every pound lent to clear existing debts, members save £1.25 each year in interest, bank charges and fees.

A single investment in deferred shares provides ongoing benefits far beyond the amount invested. With the regulatory requirement for credit unions to hold capital representing 10% of their assets, an investment of £100,000 of deferred shares would allow £1 million to be lent and leads to £1.25 million in benefits to members in a single year.

Over four years, the Credit Union’s members could save some £5 million of loan costs. This is money that is likely to stay in the community, benefitting local businesses and supporting local employment.

Martin Groombridge adds: “The concept of social enterprise and social investment is tried and tested, proven to bring real benefits to our communities. The launch of our deferred shares provides social investors with a practical way of helping more people escape from high cost debt.”

Investors looking to make a difference to the local community can find out more and apply for shares here: https://www.ethex.org.uk/LondonCapitalCreditUnion.

London Capital Credit Union welcomes largest ever customer satisfaction survey

London Capital Credit Union, a not-for-profit co-operative which provides savings and low cost loans to people living, working or studying in Barnet, Camden, City of London, Hackney, Haringey and Islington, has welcomed a new report which found significant approval for the services offered by credit unions.

Martin Groombridge

Martin Groombridge, Chief Executive of London Capital Credit Union

The largest ever survey of credit union customers, published by Financial Inclusion Centre, found that 81% of members across the country were extremely satisfied or very satisfied with their credit union, while 84% said they would recommend a friend or family member. This compares to a recent Which? survey showing that mainstream banks’ average overall customer satisfaction score was only 68%.

These results support the feedback received from London Capital Credit Union’s own members. Results from the Credit Union’s 2017 annual survey show a very high overall level of customer satisfaction, with an average score of 9 out of a possible 10.

London Capital Credit Union is one of the fastest growing credit unions in the capital, with over 15,000 members and outstanding lending of nearly £12 million.

Financial Inclusion Centre research also demonstrated just how important the broad range of financial services being delivered by these not-for-profit financial providers are, with the majority of respondents using their credit union as an affordable and fair source of borrowing – giving them an invaluable alternative to high-cost credit such as payday loans, rent-to-own firms and door-step lenders.

Credit unions work hard to help their members understand financial issues and members are shown to score well compared to the general population on a range of financial capability measures, saying they feel they have their finances under control and are confident in dealing with money matters.

Martin Groombridge, Chief Executive of London Capital Credit Union, said: “The findings of the largest ever credit union customer satisfaction survey back up what we see at London Capital Credit Union and show that most members are extremely satisfied with the services provided.

“With the current pressures on household finances, credit unions such as ours provide an essential lifeline for many, offering affordable loans in time of need and supporting people to develop a saving habit. At London Capital Credit Union, we believe it is important to help people make the most of their finances and this survey shows the hugely positive contribution that credit unions make to our communities.”

Mick McAteer, Co-Director of Financial Inclusion Centre, added: “These results are very encouraging and go to show that credit unions are highly regarded by those that use them, with higher satisfaction rates than mainstream banks.”

A copy of the report, ‘An Insight into Credit Union Membership’, can be found here.

International recognition for Islington Council and London Capital Credit Union

Islington Council and London Capital Credit Union recognised

Islington Council’s work in support of its local credit union is to gain international recognition as it hosts a group of senior managers from Singapore this week.

Richard Watts from Islington Borough CouncilThe group from the Singapore National Co-operative Federation will be greeted by the Leader of Islington Council, Councillor Richard Watts, at Islington Town Hall, before visiting the offices of the credit union in Archway.

The delegation will meet with representatives from Islington Council and London Capital Credit Union at the Town Hall and will hear how the council has supported London Capital Credit Union to become the success it now is and how this benefits residents across the borough.

The group will then visit the credit union to speak directly with members and staff about the credit union’s mission and the way it encourages saving and responsible lending to residents in Islington and beyond.

Cllr Watts said: “These are difficult times for hard pressed families in Islington and beyond, as many people deal with the rising cost of living.

“Multiple loans from payday lenders are a pathway to deeper poverty, and the council has taken action to support residents to avoid getting into problem debt.

“Part of this work has been to support London Capital Credit Union, as an accessible and affordable way for people to deal with their finances.

“I am very pleased to be supporting this organisation and the excellent work it does in Islington, and I look forward to meeting our colleagues from Singapore.”

Islington Council supports The London Capital Credit Union Ltd with a one-off grant of £250,000 and annual revenue support funding of £25,000.

Martin Groombridge, Chief Executive of London Capital Credit Union, said: “Credit unions are an ethical alternative to banks and other high street lenders and their way of working is designed to benefit all members.

“We are always pleased to be able to share our knowledge with others around the world and we look forward to meeting the delegation from Singapore and welcoming them to London, and to Islington in particular.”

Credit unions in Britain have been growing consistently over the past few years as they become better known and they now have almost 1.3 million members across the country.

Added Martin Groombridge: “Over the last ten years, London Capital Credit Union has seen a huge 1,400% increase in members’ savings from £436,000 to over £6 million. And as a co-operative, we are proud that London Capital Credit Union is owned and controlled by its members – not outside shareholders.”

Find out more at www.credit-union.coop.

Savings boost for London Capital Credit Union

London Capital Credit Union logoLondon Capital Credit Union has had one of its best months ever, with member savings rocketing by £300, 000 in March alone.

The credit union saw its savings deposits grow by almost 4% last month, taking the total amount of member savings to over £7.75 million for the first time.

Martin Groombridge, Chief Executive of London Capital Credit Union, said: “2015 is proving to be another exceptional year for us, with more people than ever turning to the credit union to find a safe home for their savings.

“With bank interest rates at rock bottom, the dividend offered by London Capital Credit Union looks very attractive – last year, for example, we paid 1.2% on all of our members’ savings. For an instant access account, this rate of return is not to be sniffed at.”

Martin adds that many people are also turning to the credit union because they like its ethics and philosophy of putting customers first.

“As a co-operative owned and controlled by its members, people like the fact that their money is staying in the community and not being used to generate profits for investors or speculators.”

London Capital Credit Union is dedicated to promoting saving and helping people deal with debt and now has over 11,000 members.

“At London Capital Credit Union, we believe that one of the best ways of keeping people out of the clutches of payday lenders and other high interest lenders is to encourage a savings habit and, by putting a little bit away each month, people can soon build up a pot of money to cover any unexpected expenses,” says Martin. “We are pleased that our message is getting through and that more and more people now see the credit union as a good place to save.”

London Capital Credit Union provides secure savings and low cost loans for anyone living, working or studying in Barnet, Camden, City of London, Hackney, Haringey or Islington. As a locally owned and run co-operative, all the money saved in the credit union stays in the community and is used to help other local people.

Find out more at www.credit-union.coop.

Ten years of growth for London credit union

London Capital Credit Union logoLondon Capital Credit Union has welcomed the latest figures from the Bank of England which show that credit unions have grown dramatically over the last decade. 

While the most recent figures from 362 credit unions show credit union membership and lending have more than doubled over the past ten years, figures at London Capital show a thirty-fold increase in members, from 321 to 10,062.

Over the last ten years, London Capital Credit Union has also seen a 1400% increase in members’ savings from £436,000 to over £6 million.

The latest Bank of England figures are great news for British credit unions,” says Martin Groombridge, Chief Executive of London Capital Credit Union. “Since the first credit union was set up in Britain over 50 years ago, the sector has continued to thrive and it is good to see that growth has gathered pace in the last ten years.

“As our figures show, London Capital is one of the credit unions leading the charge and we are so proud to be delivering affordable financial services to thousands of Londoners.”

London Capital Credit Union is dedicated to promoting saving and helping people deal with debt. It provides secure savings and low cost loans for anyone living, working or studying in Barnet, Camden, City of London, Hackney, Haringey or Islington.

Across England, Scotland and Wales there are now over 1,173,200 people with credit union accounts.

As a co-operative, London Capital Credit Union is owned and controlled by its members – not outside shareholders. Members of the credit union can find out more about how their organisation has performed over the past year by attending the AGM which takes place on Tuesday 3rd March 2015, starting at 6.30pm in the Peel Centre, Great Percy Street, WC1X 9EY.

Find out more at www.credit-union.coop.

National first helps families fight off loan sharks

Martin Groombridge

Martin Groombridge

Hundreds of secondary school starters in Haringey have already opened a free £20 credit union savings account as part of a landmark financial awareness scheme by Haringey Council.

Application packs have been sent to nearly 3, 000 Haringey pupils starting Year 7 this term for a School Savers account with London Capital Credit Union, with nearly 200 students already signing up.

The council-funded scheme, the first of its kind in England, is designed to encourage children to get into the savings habit and promote alternatives to unscrupulous payday loan companies.

Accompanied by financial management lessons in schools, accounts are ‘locked in’ for two years, with students and their parents encouraged to add to their savings where possible.

Councillor Joe Goldberg, Cabinet Member for Economic Development, Social Inclusion and Sustainability, said: “We want our children to be given every opportunity to learn about money and the different financial options available as they grow up.

“Giving every Year 7 child an account with a responsible credit union will give them a chance to start saving early on in life and understand the alternatives to the scourge of legal loan sharks colonising our high streets.”

Haringey Council has provided £750,000 in loans to the credit union in the last two years, which has more than 3,000 members in the borough – and the fastest growing contingent of anywhere in London.

The credit union has issued affordable loans worth almost £1 million since October 2012 and holds more than £1 million in savings from Haringey residents.

Martin Groombridge, chief executive of London Capital Credit Union, said: “We are very pleased to be working with Haringey Council in this way to encourage children to learn the importance of saving and budgeting.

“This monetary incentive is a fantastic way to get Haringey children to open savings accounts and for their families to benefit from the services of the credit union.”

Every Year 7 child who lives in Haringey or attends a school in the borough is eligible for an account, which can be opened by simply returning the application form sent to all pupils.

For more information and to download a copy of the application pack, visit www.haringey.gov.uk/creditunion

Credit unions are good for employers

Dave Prentis, General Secretary of UNISON, and Helen Baron, President of London Capital Credit Union.

Dave Prentis, General Secretary of UNISON, and Helen Baron, President of London Capital Credit Union.

Dave Prentis, General Secretary of trade union UNISON, has become the 11,000th member of London Capital Credit Union.

Dave Prentis was signed into membership of the credit union as it launched an initiative to encourage more employers to offer transfers direct from employees’ wages to their credit union accounts.

In the UK, London Capital Credit Union is leading the way in the fight back against loan sharks and payday lenders by encouraging more people to use credit unions.

Chief Executive Martin Groombridge said: “Credit union members have access to fair and affordable loans and savings and it is in all employers’ interests to help their staff keep clear of money lenders that focus on profit and greed. As a member-owned co-operative, we are driven to improve the financial well-being of our members.”

Over the past year, London Capital Credit Union has seen a 47% increase in membership and is keen to work with employers that can offer payroll deduction to their staff.

Added Martin: “By enabling payroll deduction straight to a credit union account, employers are offering an easy and convenient way for employees to save. Financial stability can only be good for employees and their families.”

London Capital Credit Union is dedicated to promoting saving and helping people deal with debt. It provides secure savings and low cost loans for anyone living, working or studying in Barnet, Camden, City of London, Hackney, Haringey or Islington. Over the past year, it has seen a 62% increase in loans to members but at the same time has seen members’ savings increase by 59% to £6.6 million.

A typical £1,000 loan from the credit union, paid back over one year, would cost a total of just £67 in interest. This is a tiny fraction of what it would cost to borrow from a payday lender, for instance.

Martin said: “Credit union membership is good for employees and employers, with both being able to benefit. Financial problems for employees can lead to stress and illness which can result in time off work, and this in turn leads to problems for employers. A credit union can provide the services and support to help employees manage their money effectively, creating a better workplace for all.”

Find out more at www.credit-union.coop.

Credit union saved Londoners £6.5m in interest payments

People who have taken out loans with London Capital Credit Union in the last 12 months have together saved over £6.5 million in interest payments and other charges.

Martin Groombridge

Martin Groombridge, Chief executive of London Capital Credit Union

The figures were revealed by Martin Groombridge, Chief Executive of the credit union, as he encouraged people to see for themselves how much they could save by becoming a credit union member.

In the 12 months to the end of August, London Capital Credit Union issued loans to the value of £5.3 million. According to Martin Groombridge, these loans saved local people a significant amount of money. “We estimate that our members will have saved £6.5 million in interest, charges and fees by switching their borrowing to us from payday lenders and other high interest lenders.”

A loan from a credit union such as London Capital Credit Union will result in lower repayments than from a payday lender or a doorstep loan. Said Martin: “That’s where people taking our loans in London can really benefit. What’s more, our ‘Saver Loans’ are designed to help people get into the savings habit, without racking up high interest charges.”

A typical £1,000 loan from the credit union, paid back over one year, would cost a total of just £67 in interest. This is a tiny fraction of what it would cost to borrow from a payday lender, for instance.

“That extra money stays in the local economy,” says Martin, “which has to be good news for everyone.”

London Capital Credit Union is a not-for-profit co-operative dedicated to promoting saving and dealing with debt. Established in 1962 it now has 11,000 members and £7m of assets and provides secure savings and low cost loans for anyone living, working or studying in Barnet, Camden, City of London, Hackney, Haringey or Islington.

Find out more at www.credit-union.coop.

Volunteering does Omkar credit!

When Omkar Omkar HushingHushing came to Britain shortly after getting married, he already had experience working for a mortgage lender in Mumbai. However, he was unable to find a job in the UK until he volunteered at London Capital Credit Union.

“It was very hard for me to get a job when I first moved here, because people didn’t think my experience in India was relevant to the UK market,” says Omkar from Hither Green.

But now, following three months’ volunteering with London Capital Credit Union, Omkar has secured a full time job with Initial Finance in West London. “Before I had the experience at the credit union, it was hard to get an interview let alone a job,” he says.

“During my time volunteering with the credit union I met some fantastic people and I was able to help with loan decisions for their members.”

London Capital Credit Union, based in Archway, is a not-for-profit co-operative dedicated to promoting saving and dealing with debt and provides secure savings and low cost loans for anyone living, working or studying in Barnet, Camden, City of London, Hackney, Haringey or Islington.

As a volunteer at the credit union, Omkar helped out in a number of administrative roles, but he says he was most at home with the loan process.

Credit unions offer relatively small – but affordable – loans to their members. Says Omkar: “Credit unions help people get back onto their feet and I can say that they also offered me a great chance to establish myself in the UK.”

According to Omkar, the credit union’s ethical approach to financial services will stay with him in his future career. “Credit unions really do good; they care about their customers and the way they treat people will influence how I deal with people in the future.”

To find out more about how London Capital Credit Union could help you, please visit www.credit-union.coop