Check out this brilliant post on how ‘Credit unions provide a much-needed alternative for many consumers’:
The UK has a money problem. And no, I don’t mean our national debt. This one is personal. Money being borrowed by consumers recently saw its highest jump in eight years, whilst one in three of us couldn’t afford a £200 expense in an emergency without borrowing. A whopping nine million Britons are in debt.
The Christmas season just gone caused a typical upsurge in consumer spending; the average British family was set to spend £800 on their celebrations.The arrival of the New Year, however, has heralded an altogether different story. For many, the aftermath of the festive season brings into clear focus their own financial struggles.
The Church Credit Champions Network is trying to do something about this. Set up in response to the Archbishop of Canterbury’s famous ‘Wonga’ comments made in July 2013, the network is working with credit unions, debt advice providers and other initiatives to build a more financially resilient society, all through the local church.
Credit unions provide a much needed financial alternative for many consumers, particularly around Christmas time. Most credit unions offer Christmas savings accounts, where members are incentivised to save money throughout the year for the annual big spend, and can only draw it out in November and December.
Credit unions also provide flexible, low-cost credit. This is a much-needed and fairer alternative to many other organisations out there, such as the payday loan companies which offer only expensive loans with interest rates, and the banks who exclude so many on lower incomes from accessing their products. One Kensington-based credit union saw a 25% increase in loans this Christmas as people ditched payday lenders.
Churches can support credit unions in various ways, such as promoting membership to congregations and communities, or by opening up buildings as points of access for credit union services. The Church Credit Champions Network has built relationships with local credit unions and is connecting them with churches in order to scale up this vital sector.
Debt advice and money management help is also widely needed to build a more financially resilient society. Christians Against Poverty run a fantastic debt counselling model for churches and helped around 2,500 people go debt free in 2014. They have also produced a savings-focused budgeting course. Community Money Advice offer a debt advice centre model for churches too. The Church Credit Champions Network is encouraging churches to consider offering these services wherever they can.
By March this year, the network is on target to have generated £2.2 million in social benefit, measured by the estimated increase in access to affordable credit and increased volunteering due to its activities. Two hundred churches across the network’s current active areas of London and Liverpool have engaged in some way, and almost 3,000 people have joined credit unions as a result. These figures are set to dramatically increase as the network rolls out nationally in 2016 and the church continues to support credit unions, and offer debt advice and money management help.
Through its resources, relationships and connections, the Church Credit Champions Network is beginning to help build a fairer financial society but perhaps more importantly, it is also providing the Church with a vehicle through which to act on its mission.
– Tom Newbold, London coordinator for the Church Credit Champions Network