Archive for the ‘credit unions’ Category
Welsh Government’s vision for credit unions set out by Minister for Communities and Tackling Poverty
The Wales Co-operative Centre runs a number of projects that promote financial inclusion and that provide advice on money management. These projects are a key part of the Centre’s role in developing and implementing solutions to strengthen communities and promote inclusion in Wales. Rhian Hughes, who works on one of these financial inclusion projects, blogs about the recent Welsh Government Credit Union Conference…
Yesterday’s (Thursday 17 July) Welsh Government Credit Union Conference showed the innovative and flexible approach that credit unions have in Wales. Jeff Cuthbert AM, the Minister for Communities and Tackling Poverty, set out the Welsh Government’s vision for credit unions in Wales and that modernising credit unions, so they attract more working middle income earners and work more closely to offer financial products nationally, will help make them fitter for the future.
From offering low cost loans and savings to those who are financially excluded, to offering loans at rates that compete with the high street lenders, credit unions are for everyone and we should all be promoting this around Wales. An example of this is North Wales Credit Union offering a lower rate on loans of £7,500-£15,000 at a very competitive APR compared to the high street.
The Wales Co-operative Centre has a strong history of supporting the credit union movement in Wales, and was pleased to be part of this day. Jo Lovell, Tackling Homelessness through Financial Inclusion (THFI) Project Manager and Rhian Hughes, North Wales Financial Inclusion Champion, delivered a workshop looking at how credit unions can work with the housing sector.
It was also great to hear about the success of the advertising campaign for Credit Unions Wales, which had been funded by Welsh Government. The all Wales branding shows the partnership working between credit unions in Wales.
So, if you’re not yet a member of your local credit union, what are you waiting for! Visit – http://www.findyourcreditunion.co.uk/home to find your nearest one.
Today marks the start of a campaign that the Wales Co-operative Centre is running for Co-operatives Fortnight (21st June – 5th July) that shows the strength and diversity of co-operative businesses in Wales.
Through a series of blog posts, the ‘Modern Pioneers’ campaign highlights the sizes and types of co-operatives in Wales and the sectors in which they operate. It’s inspired by the Rochdale Pioneers, who are among the forefathers of the co-operative movement.
We’ve worked with 14 people, who are at the heart of their own businesses, to explain what it’s like to be a part of the co-operative movement in Wales, why they got involved in the first place and how they see the role of co-operatives in the Welsh economy. We’ve also attempted to replicate the famous, original image of the Rochdale Pioneers, through a series of special photo-shoots around Wales, with the magical, finishing touches made on Photoshop.
The Rochdale Society of Equitable Pioneers was a group of 28 people, around half of whom were weavers, that was formed in 1844. As the mechanisation of the Industrial Revolution was forcing more and more skilled workers into poverty, these tradesmen decided to band together to open their own store, selling food items they could not otherwise afford. With lessons from prior failed attempts at co-operation in mind, they designed the now famous Rochdale Principles, and over a period of four months they struggled to pool one £1 per person for a total of 28 pounds of capital. On 21 December 1844, they opened their store with a very meagre selection of butter, sugar, flour, oatmeal and a few candles. Within three months, they expanded their selection to include tea and tobacco, and they were soon known for providing high quality, unadulterated goods. Ten years later, the British co-operative movement had grown to nearly 1,000 co-operatives.
The rest, as they say, is history. The Rochdale Pioneers are often talked about in the same breath as Robert Owen, as being the forefathers of the co-operative movement. We hope our Modern Pioneers campaign helps to increase awareness of the roots of co-operative development, while showing what today’s co-operatives in Wales are achieving.
We’d just like to thank all of our Modern Pioneers who participated, as well as those who hosted the photo-shoots, including Saith Seren, the Robert Owen Museum, Dynamix, 4CG and the John Lewis store in Cardiff. Thanks also to Mike Dean of Eye Imagery Photography for working with us on this project.
Mae heddiw yn nodi man cychwyn ymgyrch a gynhelir gan Ganolfan Cydweithredol Cymru ar gyfer Pythefnos Gydweithredol (21 Mehefin – 5 Gorffennaf) sy’n dangos cryfder ac amrywiaeth busnesau cydweithredol yng Nghymru.
Trwy gyfres o bostiadau blog, mae’r ymgyrch ‘Arloeswyr Modern’ yn amlygu maint a mathau’r mentrau cydweithredol yng Nghymru a’r sectorau lle y gweithredant. Mae wedi’i hysbrydoli gan Arloeswyr Rochdale, grŵp sydd ymhlith cyndeidiau’r mudiad cydweithredol.
Rydym wedi gweithio gyda 14 o bobl sydd wrth wraidd eu busnesau eu hunain, er mwyn egluro sut deimlad yw bod yn rhan o’r mudiad cydweithredol, pam aethant ati i ymuno yn y lle cyntaf a sut y gwelan nhw rôl mentrau cydweithredol yn economi Cymru. Rydym hefyd wedi rhoi cynnig ar ail-greu’r ddelwedd enwog wreiddiol o Arloeswyr Rochdale trwy gyfres o sesiynau tynnu lluniau ledled Cymru, gan ychwanegu’r cyffyrddiadau olaf, hudolus trwy Photoshop.
Ffurfiwyd y Rochdale Society of Equitable Pioneers yn 1844 gan grŵp o 28 o bobl, a thua hanner ohonynt yn wehyddion. Wrth i fecaneiddio’r Chwyldro Diwydiannol orfodi rhagor o weithwyr medrus i dlodi, penderfynodd y crefftwyr hyn ddod at ei gilydd er mwyn agor eu siop eu hunain, yn gwerthu bwyd na allent fforddio prynu fel arall. Gan gofio’r gwersi a ddysgwyd o gynigion aflwyddiannus y gorffennol i gydweithredu, cynllunion nhw Egwyddorion Rochdale, sy’n enwog erbyn heddiw, a thros gyfnod o bedwar mis cawsant drafferth cydrannu £1 yr un am gyfanswm o wyth punt ar hugain o gyfalaf. Ar 21 Rhagfyr 1844, agorwyd y siop ganddynt gyda dewis cul iawn o fenyn, siwgr, blawd, blawd ceirch ac ychydig ganhwyllau. O fewn tri mis, ehangwyd y dewis i gynnwys te a thybaco, a chyn hir roeddent yn adnabyddus am ddarparu nwyddau pur o ansawdd uchel. Ddeng mlynedd yn ddiweddarach, roedd y mudiad cydweithredol wedi tyfu i bron 1,000 o fentrau cydweithredol.
Mae’r gweddill yn hen hanes. Crybwyllir Arloeswyr Rochdale yn aml yn yr un gwynt â Robert Owen, fel cyndeidiau’r mudiad cydweithredol. Gobeithiwn y gall ein hymgyrch Arloeswyr Modern helpu i godi ymwybyddiaeth o wreiddiau’r datblygiad cydweithredol, gan ddangos yr hyn y mae mentrau cydweithredol yn eu cyflawni yng Nghymru heddiw.
Hoffwn ddiolch i bob un o’n Harloeswyr Modern a gymerodd ran, yn ogystal â’r rheini a gynhaliodd y sesiynau tynnu lluniau, gan gynnwys Saith Seren, Amgueddfa Robert Owen, Dynamix, 4CG a siop John Lewis Caerdydd. Diolch hefyd i Mike Dean o Eye Imagery Photography am weithio gyda ni ar y prosiect hwn.
The Wales Co-operative Centre runs a number of projects that promote financial inclusion and that provide advice on money management. These projects are a key part of the Centre’s role in developing and implementing solutions to strengthen communities and promote inclusion in Wales. Jocelle Lovell, who manages one of these financial inclusion projects, blogs about two recent reports on personal money matters…
In the past month we have seen the publication of the ‘Changing Household Budgets’ report by the Money Advice Trust (MAT) and the National Survey for Wales 2012-13.
Whether we look at this from a UK perspective or a local Welsh one, the evidence clearly shows that both in work and workless households people are struggling to keep up with their financial commitments on a regular basis. More typically those affected are aged between 25 – 44 and 45 -64, and live in the social or private rented sectors. As the nature of the debt has shifted, we are seeing more people falling behind with payments such as rent, gas, electric, phone and catalogue bills.
Evidence from the Wales Co-operative Centre’s own work ‘Tackling Homelessness Through Financial Inclusion’, which is funded by the Oak Foundation and Welsh Government, supports the findings of MAT, in as much as tenants in the private rented sector have struggled in the past 12 months to pay one or several of the following bills; rent, utilities and food. Three quarters of the tenants we visited were on pre-payment meters for gas and, or, electric and had borrowed money from various sources including catalogues and door step lenders. The majority of people visited were on low incomes (£1,000 or less per month), and we witnessed households in budget deficits. Where possible we looked to maximise income through programmes such as Welsh Water Assist, Housing Payments, and the Discretionary Assistance Fund.
There is a clear need for people to seek advice at an early stage, to stop their problems spiralling out of control to the point that they could potentially become homeless. To achieve this both public and third sector partners need to work collaboratively with organisations such as Money Advice Service (MAS), Citizens Advice Bureau (CAB) Step Change Debt Charity to ensure services are widely promoted through the various forms of media. Services also need to be accessible and timely in providing advice and support to those in need. With ongoing budget cuts this can be a big challenge but, we know early intervention offers better value for money than costly crisis intervention.
For people experiencing problems with money, or are just looking for some simple advice and guidance, they can go to our moneymadeclearwales.org website. It has been developed as a simple tool to help people navigate their way through the maze of financial information available on the internet. It will direct you to relevant advice and support agencies and to helpful tools such as a cut back calculator and a budgeting tool. The site also has pages on work and money. We know that all too often it can be a difficult transition moving from benefits into work, having to manage for longer periods of no money, needing to pay for travel and so on. The Money Made Clear Wales website offers practical tools and advice to help people.
We welcome the inclusion of support for advice services and access to financial services as a key area for intervention in tackling poverty. The Wales Co-operative Centre believes that access to responsible and appropriate financial services is critical to tackling poverty. We believe that the availability and use of credit union services are critical to both the individual and the community and so welcome plans to support access to credit unions and to broaden their membership for people who live and work in rural Wales.
Within rural communities with poor access to high-street banks and mainstream financial institutions, credit unions can provide an alternative. Furthermore, they are driven by their social purpose and not on commercial interests alone. They offer members financial products such as current accounts and affordable loans but also financial education and access to money advice. They are co-operatives and members have a say in how the credit union is run.
An excellent example of a strategic intervention helping in rural areas is the formation of North Wales Credit Union in 2010. Following the merger of 5 credit unions in the area, the Credit Union Current Account became available to all living or working in North Wales. Prior to merger the current account was only available to the members of Llandudno and District Credit Union with the smaller rural credit unions unable to reach the critical mass of membership needed to operate such a product. This new dynamic offers those in rural areas the use of this advanced transactional service along with responsible and affordable financial products that credit unions offer, at distance from any of their offices, without the need to travel.
We also believe that there is scope for a holistic approach to tackling digital and financial exclusion. This approach would help to improve people’s capabilities and ensure fair access to services. It would be particularly beneficial for those who experience in-work poverty or who experience poverty while on a moderate income by equipping them with skills and capabilities to better manage their money and access a range of services.
Dywed Martin Lewis ‘Mae arfer dyled annifyr gan y DU gyfoes’, ac mae yn llygaid ei le. Nid wyf yn dweud hyn o bersbectif beirniadol (ac rwy’n siŵr nad yw yntau ychwaith). Ond, os cymerwch gam yn ôl ac edrych yn wrthrychol ar sut rydym yn rheoli ein bywydau ariannol personol, ni chredaf y byddai llawer o bobl yn anghytuno.
Mae’r cynnydd brawychus mewn rhoddwyr benthyciadau diwrnod cyflog, a’u defnydd a’r ymgais i atal eu defnyddio yn un symptom yn unig o’r broblem. Felly ai deddfwriaeth a rheolaeth yw’r ateb? A ddylai llythrennedd ariannol fod yn rhan orfodol o’r cwricwlwm ac a ddylai dyletswydd fod ar awdurdodau lleol i hyrwyddo cynhwysiant ariannol?
Gallai unrhyw un sy’n darllen fy mlogiau’n rheolaidd ddarogan mai fy ateb i hynny yw… mae’n gymhleth.
Mae gwaith ymchwil o lu o ffynonellau, gan gynnwys y Gwasanaeth Cynghori Ariannol, yn dangos bod pobl ifanc yn dysgu am arian gan eu rhieni’n bennaf. Mae’r amgylchedd ariannol maent yn rhan ohono fel teuluoedd yn heriol ac yn gymhleth. Byddai darpariaeth yn yr ysgol yn helpu ond mae’n rhaid adleisio’r negeseuon hyn gartref. Golyga hyn fod yn rhaid i rai rhieni ddysgu i reoli eu harian yn well yn gyntaf.
Yna cewch y mater o wasanaethau ariannol. Un peth yw dweud wrth bobl am fod yn ‘gall’. Mae cyfnodau da a drwg bywyd yn aml yn cyplysu â chyfnodau ariannol da a drwg. Os oes angen benthyca swm bach o arian ar rywun ac nid yw’r banc yn ei roi, ble mae’r person yn mynd? Yn anffodus mae mwy a mwy o bobl yn troi at roddwyr benthyciadau diwrnod cyflog yn hytrach na rhoddwyr benthyciadau cyfrifol megis undebau credyd.
Mae’n ddiddorol y gallai cyflwyno gwiriadau ‘ymddygiad arian’ mwy llym ar gyfer ceisiadau am forgais fod yn rhyfeddol o effeithiol wrth newid agweddau rhai pobl at arian. Ni fydd defnyddio benthyciadau diwrnod cyflog (boed wedi’u had-dalu ai peidio) yn dderbyniol bellach – ac nid yw hyn yn fy synnu. Gallai fod yn fater o amser yn unig cyn i fathau eraill o fenthyg ddilyn yr un drefn. Yn wir, mae nifer o undebau credyd eisoes yn cynnal y trafodaethau hyn â benthycwyr.
Mae Llywodraeth Cynulliad Cymru ar hyn o bryd yn ystyried cynnig ynghylch Bil Addysg a Chynhwysiant Ariannol. Edrychwch ar ein hymateb i’r ymgynghoriad ar y Bil hwn. Mae’n gymhleth ond nid yn amhosibl.
Martin Lewis says ‘The modern UK has a nasty debt habit’ and he is right. I don’t say this from a judgmental perspective (and I am sure he doesn’t either). But, if you take a step back and look objectively at how we manage our personal money lives I don’t think many people would disagree.
The alarming rise of pay day lenders, their use, and attempts to curb their use, is only one symptom of the problem. So is legislation and regulation the answer? Should financial literacy be a compulsory part of the curriculum and local authorities have a duty to promote financial inclusion?
As anyone that reads my blogs regularly might predict, my answer to that is …it’s complicated.
Research from a plethora of sources, including the Money Advice Service, shows that young people learn about money primarily from their parents. The financial environment that they, as families, live in is demanding and complicated. Input at school would help, but these messages need to be echoed at home. This means that some parents need to learn to manage their money better, first.
Then there is the matter of financial services. It’s all very well to tell people to be ‘prudent’. Life’s ups and downs are often partnered with money ups and downs. If someone needs to borrow a small amount and the bank won’t lend it to them, where do they go? Sadly more and more people are turning to pay day lenders instead of responsible lenders like credit unions.
Interestingly, for some, the introduction of much more stringent ‘money behaviour’ checks for mortgage applications may be surprisingly effective at changing attitudes to money. No longer will the use of pay day loans (whether paid off, or not) be acceptable – and I am not surprised. It may only be a matter of time before other kinds of lending follow suit. Indeed many credit unions already have these conversations with borrowers.
The National Assembly for Wales is currently considering a proposal for a Financial Education and Inclusion Bill. Take a look at our response to the consultation related to this Bill. It’s complicated, but not impossible.
After a flurry of announcements on payday lending over recent weeks, I have been reflecting on options for borrowing. My conclusion is, as usual, that it’s complicated.
Payday lenders are going to be more tightly regulated, so we are told. This is long overdue. There are many horror stories of people with multiple and spiralling debts because they have used payday loans which have become out of control. In some cases normally entirely law abiding people have turned to crime, such has been the desperation.
So what is to be done? The news that payday lending will be better regulated is obviously welcome. The prediction that many will go out of business will not cause swathes of the population to lose sleep. Does this mean though that there will be a gap in borrowing facilities?
As a society, we feel the need to provide whatever services people want. If there is a market we should fill it. Somebody, somewhere will provide the service. That may be the case, but I wonder at what cost?
There have been many calls for credit unions to step up to the plate and replace payday lenders. The Financial Conduct Authority recently raised the cap on credit union interest rates. They can now charge up to 3% a month (42.6% APR) which pales into insignificance when compared to the 4000%+ APR that payday lenders charge. Of course not all credit unions will charge this maximum and those that do will only do so when they need to – when the loan is seen to be ‘risky’.
The trouble is that credit unions are there to provide ‘affordable and appropriate’ credit. They are not allowed, by their rules and the regulation, to lend to people who clearly can’t afford to repay their loan. Apart from being risky, lending to someone who can’t afford to repay is unethical, which doesn’t sit well with the credit union ethos. This is the conundrum that we face; how do we help people to meet their financial needs without sending them into spiralling debt.
The answer is simple to state, but extremely difficult to achieve. It is about a balance of people learning to manage their money lives better and having affordable and appropriate financial products for them to use when they need them.
To hear more on my views on this topic, listen to an interview that I’ve given on SoundCloud.