Please send me SCA's fortnightly briefing:

February 11, 2009

A People’s Bank?

The idea of transforming our Post Office network into a Bank with explicit social aims, has to be welcomed. But many argue that it’s the fledgling Credit Union movement where the investment should be made. A meagre 1.3% of the British population have an account with a credit union compared to 70% or more in Ireland, Canada and many other countries around the world

Credit Unions in Britain

A credit union is a financial co-operative which provides savings, loans and a range of services to its members. It is owned and controlled by the members. Each member has one vote and volunteer directors are elected from the membership, by the membership. Credit unions share the co-operative ethos of people helping people.

Membership of a credit union is based on a common bond. This can be living or working in a certain geographical area, working for a particular employer or in a particular industry. Some common bonds cover villages or towns, while some common bonds can cover entire cities or regions.

Around the world, there are 172 million members in 46,000 credit unions operating in 97 countries. In the USA, Canada and Australia, over a quarter of the population belong to a credit union.

There are 497 credit unions in Britain with a combined adult membership of over 600,000 plus 100,000 junior savers. British credit unions hold around £600m in assets, with around £450m held in savings and around £400m out on loan.

The credit union movement in Britain has grown rapidly over the last decade, with assets, loans and savings all more than doubling. On average credit union membership has been growing by between 5% and 15% per year for the last 10 years. As a result, total membership has risen 227% since 1997.

The popular view of credit unions run entirely by volunteers and only open for a couple of hours a week in a community centre is rapidly disappearing. Today, credit unions are far more likely to be found in staffed high street premises, open normal business hours, providing a range of services and working with a range of partners such as Citizens Advice Bureaux and Housing Associations.

Credit unions are regulated by the Financial Services Authority and members savings are covered up to £50,000 by the Financial Services Compensation Scheme.

More on the Third Sector Credit Union Fund here

For further information see