Credit unions 'help some manage debt'
Published On 19 August 2007
Credit Unions perform a vital role in promoting the saving culture and helping mitigate debt problems in the UK, an industry expert has revealed.Lucia Webster, a spokesperson from ABCUL, the main trade association for credit unions in England, Scotland and Wales, explained that credit unions help people who would normally struggle to find loans obtain sensible finance deals.
She added: "By taking a loan from a credit union, these borrowers have the knowledge that they are dealing with a locally owned financial co-operative, rather than a door step lender.
"These loans are based on a careful analysis of affordability, so that the borrower does not fall into unmanageable debt."
Ms Webster added that credit unions help promote a saving culture as they often have branches in areas which are traditionally poorly served by financial institutions like banks.
Finally, Ms Webster pointed out that credit unions offer a fair service because the interest rates on loans are "low and transparent".
Recent figures show that consumer debt in the UK exceeded £1.3 trillion in June.
