Welsh Liberal Democrat MP for Ceredigion, Mark Williams, is supporting the Credit Unions of Wales campaign to encourage Welsh savers and borrowers to choose this community based alternative to other financial organisations.
Credit Unions are financial co-operatives that are community-focused, and unlike banks, are owned and controlled by their members. They offer saving facilities and loans for members, and run for their benefit. Volunteer directors are elected from the membership and the income generated by lending helps Credit Unions meet their operating expenses, build reserves and pay savers dividends wherever possible.
Each Credit Union has a 'common bond' which determines who can become a member, usually people living or working in the same area, working for the same employer, or belonging to the same association, or a combination of these. By law, the amount of interest charged by a Credit Union can be no more than 3% a month (an APR of 42.6%) – and many charge less. They also only charge interest on the reducing balance of the loan (not the whole initial amount), no set-up fees, administrative costs or early repayment charges, with many offering free insurance on loans up to £5000.
They are helpful to families or individuals on low-incomes who don't have access to the financial products of larger banks, and the emphasis on savings and low cost loans also provide financial education.
Wales has 21 Credit Unions, and in the last 12 months the combined savings held by Credit Unions in Wales have risen from £24m to £28m. There are now over 75,000 Credit Union members in Wales, of which 62,500 are adult members and over 12,500 are junior members.
Commenting, Mark Williams MP said:
‘In Ireland, around 70% of the population are members of Credit Unions, whereas in the UK that figure is less than 2%. I hope we can raised awareness and understanding around Credit Unions in Wales to assist those consumers who may otherwise borrow using payday lenders or who may be financially excluded for both loans and savings.
‘If consumers choose to invest in Credit Unions, they not only contribute to the sustainability of the Credit Union itself, but also the sustainability of their local community. I hope more people who need access to financial services may consider using a Credit Union in future.’
People can find their local Credit Union by going online at http://www.findyourcreditunion.co.uk/home. Locally, there is the West Wales Credit Union, whose office is in Cardigan, and can be contacted by calling 01239 621 408, or by emailing [email protected].