Transcript Document

Welcome
03 July 2014
My goal for the day is simple…
...to pave the way for more
co-operation.
 To get Housing Associations and Credit Unions to partner more
effectively
 To build on the excellent examples of partnering we already
have
 To build new alliances and to reaffirm those that already exist
 Hopefully a day with something for everyone
Why?
The impact of financial exclusion
 People that have survived the recession
 Changed job (period out of work)
 Missed car or other credit payments and max’d out a couple of
cards
 Back on course learning to live on less
 Can’t get credit from any mainstream source
 Turning to high cost credit out of necessity
12m people
BIG business for some
Financial Exploitation
Impact of high cost borrowing
£638
£314
£210
Cash
Price
£225
Credit Union
Loan
Home
credit
provider
Weekly
payment
Store
Impact of high cost borrowing
 People’s living standards
 Limits the ability to save
 Impacts household budgets
 Creates financial stress
 Reduces money supply in communities
 Curtails economic growth
 Contributes to increasing levels of poverty
Average savings on a
Credit Union loan v. a
doorstep lender is £401
(Source DWP)
Multiply the savings by
the number of loans
granted since October
2006
This equates to
£4,803,178 over a 73
month period
Or £65,797 per month.
What is a Credit Union?
Licensed Deposit Taker
Members save in a common fund
 Financial co-operative owned by its
members (1 member – 1 vote)
 Operate within a defined area – a
common bond
Lender
Make personal loans to members
 Members elected unpaid directors
 Each sets its own independent
operating standards and methods
Interest Generated
Covers for operating costs & reserves
Not-for-Profit
Surplus repaid as a member dividend
 All regulated by the PRA in a
similar manner to any other UK
 Covered by the FSCS £85,000
deposits guarantee
Our borrower profile
A
B
C
D
E
Has capacity, has proven intent & a
good credit profile
Has capacity & has intent but a
weak credit profile
Has limited capacity & has intent
Has capacity but no intent demonstrated
Highly stressed financially with no capacity to repay
(Legislation NOT Lending)
We do not rely on score cards or automated underwriting
but use a face-to-face assessment of capacity and intent
What we can do
 Put back into the pockets of your tenants money paid in
unnecessary interest repayments
 We can help tenants budget for rent and council tax (some
credit unions have already developed specialist savings
products – Rent Direct)
We can’t do
 Give financial or debt advice but we can refer
 Give a loan to someone that can’t repay it
The future
 Become self-sufficient or cease to exist (reduced WG funding)
 Attract more members, including people on middle and higher
incomes who can save and borrow larger amounts
 By growing our presence in this middle market, we can improve
net interest revenue and continue to off-set the cost of
delivering more socially orientated savings and loan
programmes to the less fortunate in our Society
 With only a 2% market share we need to grow
We'd like your help
Thank You