Local authorities should avoid supporting small “residents only”
community credit unions, according to the Local Government
They “rarely achieve their original intentions”, says a report
launched by the LGA last week. Instead, they usually remain “small,
dependent on external support, and focused on carrying out basic
operations rather than development and growth”.
To help the wider community, councils should consider developing
credit unions with local employers and the community, says the
report. “Even a small local authority can act as an enabler,
through providing the credibility to bring in other public and
private sector providers.”
Credit unions are not-for-profit co-operatives offering low-cost
saving and loan schemes in some of the country’s poorest
communities. The government believes they can be part of its plans
for tackling social exclusion and help poorer people gain access to
financial services. They will come under the regulation of the
Financial Services Authority in July next year, a move that will
help them to become more mainstream and sustainable.
Changing Credit Unions: Paying Dividends in Community Finance
from 020 7296 6523.