Renfrewshire Council is set to consider a £175,898 investment in local credit unions as part of a two-pronged drive to fight high-cost lenders and tackle poverty.
If approved by next week’s Leadership Board the move will also see the area’s first credit union funeral loan – available to all residents, not just credit union members – developed.
Councillor Mike Holmes, Renfrewshire Council’s Depute Leader, said: “The spiralling cost of living, coupled with lower wages and welfare reform, have pushed more people towards high-cost credit. We are willing to be bold and innovative in our two-fold fight against payday lenders and poverty – and that’s why we want to invest this £175,989 sum into local credit unions.
“If we are to genuinely tackle high-cost loans and the negative impact they have on families, we must make sure an alternative is in place locally by providing access to dependable banking services and affordable credit. That’s why it’s crucial to invest in local credit unions.
“We also know that paying for a funeral can cause hardship for many and we want to address the very real issue of funeral poverty that many families face. The funding pot we want to allocate to Renfrewshire Wide Credit Union will use £13,100 to develop a new funeral loan product available to all residents to alleviate potential financial crisis at what is already an extremely difficult time.”
The £175,989 would be allocated across four credit unions – Renfrewshire Wide, Gleniffer, White Cart and Johnstone – and local voluntary sector co-ordinator Engage Renfrewshire.
As well as Renfrewshire Wide being keen to use funding to develop a new funeral loan for local residents, Gleniffer and White Cart also want to develop funeral plans and loan products.
Engage Renfrewshire would be supported to take forward development work across Renfrewshire to make credit unions more sustainable in the long term.
The £175,989 cash boost would bring the council’s total investment in local credit unions since 2014 up to more than £400,000.
The credit union investment helps to modernise services, build capacity to meet wider demand, offer a greater variety of products, build on financial education work in local schools, raise awareness of the benefits of credit union membership, and encourage saving and budgeting.
Councillor Holmes added: “Credit unions have a valuable role to play within the community because they are safe, ethical, not-for-profit and run for the benefit of members. We are working closer than ever with credit unions to support their development while making sure local people have access to their affordable rates. We want Renfrewshire to have one of the strongest credit union networks in the country.”
The council’s credit union development allows a range of positive work to be taken forward:
- Transactional bank accounts
- Lower cost credit
- Web-enabled accounts and ‘online banking’
- Stronger online presence and functions such as smartphone enabled sites
- Increased membership
- Developing financial education in schools
- Developing new saving and borrowing products
- Strengthening links with young savers
- Extending Credit Unions to primaries that don’t have one at present.
- Extra staff to deliver services and school development officers
- Training for staff, volunteers and board members.
- Promoting Renfrewshire’s strong credit union offer and its benefits
On 17 February the Leadership Board will be asked to approve a £175,989 credit union allocation.
Note to news editors:
1) The council’s budget 2014/15 identified a £500,000 credit union investment pot to support credit union development in Renfrewshire.
2) In June 2014 Renfrewshire Wide Credit Union (RWCU) was allocated £200,000 and White Cart Credit Union (WCCU) was given £27,000. In Nov 2014 £22,000 was allocated to Glenburn Credit Union.
3) Renfrewshire Council hosts a Credit Union Forum to regularly bring local credit unions together to strengthen their links and support their development.
4) Local credit unions also work with Renfrewshire Council to deliver the iSave credit initiative for S1 pupils.