Report to the People
Credit Unions
In March, largely unnoticed and unreported in the press, the Scottish Executive made a significant announcement. Deputy Minister for Communities, Jackie Baillie, launched a pilot scheme to encourage wider use of, and access to, credit unions.
The scheme is designed to help credit unions grow and learn from each other. The aim is to make them expand as sustainable businesses and the Glasgow pilot project, funded by the Scottish banks and the City Council, involves the design and delivery of a "health check programme" for credit unions.
Credit unions are not a poor person's bank. They provide access to affordable financial services for the communities who need them most.
They are member-owned, not-for-profit financial institutions who encourage savings by offering a fair return. Those savings are then used to make loans at low interest rates to members. Their non-profit status enables credit unions to operate at a lower cost than banks or loan companies and helps them to offer competitive loan and savings rates.
They also keep vulnerable people from the clutches of loan sharks.
We, in Greenock, are lucky. In the Tail o’ the Bank, we have a first class credit union. When it was founded, over 16 years ago, the Rev. Ian Fraser, came to speak to a meeting of the Shipyard Shop Stewards Committee, to outline the plan. We agreed to donate £2000 help establish the credit union – and it has gone from strength to strength. Lending between £100 and £10,000 and with an annual turnover in excess of £1 million, today they have 3,000 members and receive 20 new members every week.
But the availability of a credit union should not be a matter of luck. Access to low cost financial services are necessary for most households and should be seen as a right.
I believe the scheme will widen access to such services and was glad to have an opportunity to highlight the issue at Question Time in Parliament. Responding to my question, the Minister, Jackie Baillie, again praised credit unions and acknowledged the part that they have played in promoting self-help, acting as a channel for enterprise and developing skills and commitment in their volunteers.
It is not, of course, only a matter for the Scottish Parliament. The best way to expand credit unions is by increasing demand. If more of us use them, they would have to expand and send, co-incidentally, a strong message to the increasingly unpopular banking industry.
When it seems that every week we read a story about banks overcharging or charging us to get our own money, having an alternative, community based financial sector will act as a powerful restraint. Credit unions can remind banks who they should be serving and deliver fair financial services for all.
[ HOME ] [ News ] [ Calendar ] [ Contacts ] [ Links ] [ E-Mail ]
[ Copyright ] [ Open Government ] [ Scottish Parliament ]