Spotlight on: Merthyr Tydfil Borough Credit Union
Throughout Co-operatives Fortnight 19 June – 3 July, several co-operatives in Wales will be featured on the Radio Wales Jamie and Louise Show 9am to midday. We will also be telling their stories, and others, here on our blog.
Credit Unions are financial co-operatives, owned and managed by the members who use them.
Merthyr Tydfil Borough Credit Union
Merthyr Tydfil Borough Credit Union is a not-for-profit financial co-operative and an affiliated member of the Association of British Credit Unions.
Under its banner members save together to create a pool of money which is then used to lend out as loans to members if the community.
It provides a service offering safe, convenient savings and affordable loans to those who live or work in the county borough.
They then have a say in what to do with the profits; whether to invest them in better services or share them with members.
“The Credit Union was established in October 1998 by community members who identified the need to tackle issues such as social and financial exclusion, unlicensed lenders (loan sharks) and the lack of savings culture in the area,” said the Union’s engagement officer Andrew Rowlands.
He added: “The Credit Union has grown constantly over the last 11 years and now has five full-time and one part-time members of staff, serving 2,500 members and more than 60 volunteers.”
Merthyr Tydfil Borough Credit Union has four main aims as set out in the 1979 Credit union Act which are;
- the promotion of thrift amongst its members by the accumulation of their savings
- the creation of sources of credit for the benefit of its members at a fair and reasonable rate of interest
- the use and control of members savings for their mutual benefit and
- the training and education of members in the wise use of money and in the management of their financial affairs.
“Among the key services we offer are low-cost loans, savings accounts and affordable electrical goods,” Mr Rowlands said.
“Our services are open to everyone in the Borough but people financially excluded from High Street financial services tent to benefit most from these.”
“We help improve people’s lives through providing financially excluded people with convenient access to financial services, encouraging them to start saving and allowing them to stay away from high interest poverty traps.”
Many people who are financially excluded find themselves borrowing from high-cost lenders such as doorstep lenders and loan sharks who charge extortionate rates of interest from 270% to more than 2000% APR.
They take advantage of those people who are unable to access mainstream financial services and so have nowhere else to turn.
The Merthyr Tydfil Borough Credit Union, Mr Rowlands pointed out, provides affordable loans to member from 6% APR to a maximum of 26.8% APR and offers a range of savings accounts including Christmas Savers Accounts to stop people getting in to financial difficulties during what can be an expensive time of the year.
“Saving the money to pay for Christmas takes the stress out of the festive season, as well as stopping people from having to take out loans to cover the cost of it,” he said.
Unlike other lenders the Credit Union also provides free Savings and Loan insurance cover. This means that is something was to happen to a member their loans would be written off and their families get up to twice what the member has saved.
Also provided is free financial, legal and budgeting advice to both members and non-members on two morning per week.
Mr Rowlands said: “We have also introduced a number of schemes to help save people money and avoid stress. These include our scheme with the Co-operative Electrical to allow people to replace electrical items at as low a cost as possible and at a low weekly amount. We have also introduced prize draw raffles to help encourage adult members to save regularly and for Christmas.”
In terms of being easily accessible the Merthyr Tydfil Borough Credit Union now has 28 collection points throughout the Borough in locations that include community centres, schools and workplaces.
“Through these volunteer-run collection points we can bring financial services to remote areas of the borough,” Mr Rowlands explained. “They also act as community hubs and help bring people together within the community.”
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