It is a great shame to hear that our Credit Union in the Whiteshill and Ruscombe shop is to close - for over 5 years it has struggled to keep going. Huge thanks to the volunteers - the good news is that a new one opens this month every Thursday 2-3pm in the Maypole Community Hall in Paganhill (the new Post Office behind Tesco).
I've been a member of the local Credit Union for many years and helped get the original Forest Green site set up when I lived in Nailsworth. Debt is a huge issue that politicians sadly seem to ignore or know little about - see my letter earlier this year re Parmjit Dhanda MP for Gloucester.
At a meeting last year in Gloucester (see photo) that I attended on Credit Unions there was exciting talk about merging the Credit Unions in Gloucestershire to build a stronger organisation. Certainly the organisation needs to build support.
I would strongly urge people to consider joining.
What is a Credit Union?
A Credit Union is a community-based network of savers and borrowers. Credit Unions aim to provide affordable loans, encourage savings and give members help and support in managing their money. It is not for profit nor is it a charity, but rather a service run by its’ members for its’ members.
CUs were once seen as a poor person's bank, but are now widely recognised as having the potential to make a serious impact on the financial lives of people in communities throughout the country. In the US around one in four adults belongs to a CU and in Canada it is one in three. So by contrast, many in the UK are losing out on the benefits gained from being in a CU.
Every year, one in 20 adults in the UK uses finance companies which offer credit door to door. This market is worth around £2bn a year. Loans are offered at annual percentage rates which average 177% but can be as high as an astonishing 900%. Many of the people signing up for such loans fail to under-stand the terms or how much they repay in total at the end of the loan. Many are caught into a cycle of seemingly-endless debt.
About half of all such customers live on less than £9,500 a year, two-thirds are women, often with children. Almost a third of customers were people who stay at home to look after their families. Provident Financial controls almost 50% of the doorstep loans market. The other 3 main lenders are Catties, London Scottish, and S&U.
How much do I have to save? Whatever you can afford - as long as you save regularly either by calling into a collection point or by Standing Order. Each pound saved purchases you one share in the Credit Union.
Can I borrow from the Credit Union? Yes, but you will be asked to contribute to savings whilst repaying your loan. Money can also only be lent after a short savings period, but the Credit Union will consider even the smallest of loans which are not of interest to most lenders.
What rate of interest will I be charged? I think current rates are 1% per month on the reducing balance. For example a £100 loan repaid in full over one year could cost you just £6.50 in interest.
Will I be paid interest on my savings? If the Credit Union makes a profit the surplus will be returned to members as a dividend.
What happens if I lose my job? In any event that you are unable to keep up repayments you should contact the Credit Committee who will make every effort to restructure your loan.
Who will know about this? All members affairs are treated in the strictest confidence with only the Credit Committee and Treasurer involved.
Is anyone paid for running a Credit Union? The members themselves manage the Stroud Valleys Credit Union. Officers of the Credit Union are unpaid volunteers. The Credit Union is always looking for people who may be interested in helping run one of their colection points, perhaps by offering 2 hours a month. Any necessary training and help would be available.
Is the Credit Union involved with any political organisations? No
How are my savings protected? Credit Unions are strictly regulated and members money is well protected.
How can I join? As long as you live in post code areas GL5, GL6 or GL10 you can fill in an application form. The Stroud Valleys Credit Union has other regular collection points in Stroud, Uplands, Ebley Mill, Stonehouse and Forest Green. Telephone 01453 752905 for further details.
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