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