Credit Where Credit Is Due
For many individuals looking for a personal loan for a reasonably small amount, usually the first stop is their local bank, where they will probably be charged a high rate of interest for the loan in order for the lender to cover its costs and pay out shareholders.
But there is an alternative way to obtain a cheap loan which is becoming more and more popular amongst borrowers, that is the use of Credit Unions. The Scottish Affairs Committee has recently published a report into Credit Unions in Scotland, which offers high praise for these non- profit making organisations in providing cheap loans for their members and adopting a particularly good attitude towards responsible lending.
The Association of British Credit Unions Limited (ABCUL) has welcomed the report which says that Credit Unions area vital part of the solution to the current debt crisis in the UK, by offering low rate loans on a responsible basis, particularly to those individuals on a low salary.
The report makes suggestions for the government to help develop Credit Unions around the country, by making more funding available for more of them to be set up and also for local authorities to provide properties at an appropriately low rent. Other proposals include allowing Credit Unions to develop links with Post Offices in order to be able offer current accounts to those individuals who would be likely to be rejected by a high street bank for an account, or a loan.
The report also says that the government should do more to promote the existence and services offered by Credit Unions in providing personal loans and savings accounts for members, as part of their financial education programme. Mark Lyonette of ABCUL commented on the report, he said “Credit Unions appreciate the wholehearted support for the sector spelt out in the report. Credit Unions play a vital role in our communities and their services are popular and successful.”
