What are Credit Unions?
· Mutual membership organisations, members linked by something in common- usually a place of work or where they live and work (paid and unpaid).
· Mutual membership organisations, members linked by something in common- usually a place of work or where they live and work (paid and unpaid).
What do they do?
· Offer savings facilities for their members
· Work for the benefit of members, not shareholders
· Offer mainly small and affordable loans to members
· They may offer members a dividend (interest) on savings
· Offer savings facilities for their members
· Work for the benefit of members, not shareholders
· Offer mainly small and affordable loans to members
· They may offer members a dividend (interest) on savings
Are they secure?
· They are regulated as any other financial organisation
· They are regulated as any other financial organisation
So what has that got to do with being fair and kind? Credit Unions are mutual local organisations. The partnership working across Derbyshire to tackle Financial Exclusion identified Credit Unions as being part of the solution. People who can’t access affordable credit or basic banking services can be excluded in many different ways Christians have a duty to resist joining in blaming them as individuals but to struggle with them towards a mutual solution. For most Christian people hearing a story changes our attitudes.
‘Poverty is depression, hopelessness…shame, humiliation…[it] erodes the human spirit. ..
This sense of shame is mirrored by an attitude that blames individuals most likely to be in poverty for causing poverty.’[i]
Many people are finding saving money difficult (26% adults run out of money before the end of the month[ii]). Unexpected financial difficulty can arise from high interest or illegal loans but also events such as bereavement, divorce or redundancy. Credit Unions can help people when they are in need. Individuals and organisations who become members and save money allow Credit Unions to make loans to members. Through making loans Credit Unions generate income (capped at 3% a month).
Maybe you feel some sense of injustice over recent history of investment banking or the practices of banks who are free to customers but charge the poorest who get overdrawn or miss a repayment deadline. Credit Unions offer an alternative with upfront membership cost. Recognising this, St Peters Church, Belper has joined one of the local credit unions depositing money[iii]. A parishioner in South Derbyshire has supported practically by offering relevant skills on the Management Group[iv].
If the argument for social justice hasn’t satisfied you, what about what is in it for you? Joining a Credit Union is a simple way to give and therefore improve your wellbeing, ([v]). Research tells us that almost all social problems which impact everybody in a negative way have a relationship with inequality: by decreasing inequality, they decline.
‘The steeper the social gradient a problem has within a society, the more strongly it will be related to inequality’. [vi]
As we engage in our communities we can blame or we can be practical. I suggest supporting the local Credit Union is one practical way in which we can all become richer and fairer.
‘We must help credit unions to become bigger, better known and easier to access if we want them to compete with high interest lenders.’
Archbishop Justin
Stella Collishaw, Community Action Officer
For more information please see http://www.derby.anglican.org/en/
our-mission.html and click on the tab ‘Credit Unions’ or go to the home page and type ‘credit union’ into the search facility.
our-mission.html and click on the tab ‘Credit Unions’ or go to the home page and type ‘credit union’ into the search facility.
This article is published by Faith In Action, Derby Diocesan Mission and Ministry Team. If you would like to receive this publication by email please contact us at faithinaction@derby.anglican.org or 01332 388684.
[i]
What citizens say about poverty in Greater Manchester- an update Nov 2014.
[ii]
http://www.toyourcredit.org.uk/why-the-church
[v] http://www.derby.anglican.org/en/our-mission/mental-health/recommended-resources.html
Five Ways to wellbeing. New Economics
Foundation.
[vi]
The Spirit Level. Why equality is better for everyone. Wilson,R and Pickett,K
2010
