Becoming credit union member benefits wider community: Mark Fleet

Accessible Financial Services: Credit unions are known for their commitment to financial inclusion. By providing accessible financial services to individuals who might otherwise be excluded from the traditional banking system, such as people with low incomes, those with poor credit histories or young people seeking their first financial products, credit unions help boost economic activity within these underserved communities.

Affordable Loans: Credit unions offer affordable loans with reasonable interest rates and repayment terms. This is a win-win situation, as members can access credit when they need it without falling into the debt traps often associated with predatory lenders like loan sharks.

This also helps reduce financial stress within the community, improving overall wellbeing.

Community Development: Credit unions are deeply rooted in the communities they serve, and often engage in community development initiatives, such as financial education programmes, youth savings clubs and partnerships with local schools. By fostering a culture of financial literacy and responsible money management, credit unions empower their members and help create more financially savvy communities.

Member Ownership: Unlike traditional banks, credit unions are owned and operated by their members. This means that members have a say in how the credit union is run, including electing the board of directors and voting on important decisions. This democratic structure ensures that the financial institution remains accountable to its members and aligns its operations with the needs of the wider community.

Supporting the Vulnerable: Credit unions are particularly important for vulnerable and marginalised communities, offering a lifeline to those who may not have access to traditional banking services.

They also help to keep people away from loan sharks who frequently target society’s most vulnerable.

They work by lending money to those that are struggling to make ends meet and who may have been turned down for a loan from more reputable sources, promising to provide them with a quick and easy loan, only to apply sky-high APR rates that trap their financially vulnerable victim in a cycle of debt. If the victim can’t afford the repayments, the loan shark will often resort to intimidation and violence until the loan - plus interest - is repaid in full.

By providing a safe alternative to loan sharks, credit unions also offer their members a sense of security and hope.

Becoming a member of a credit union in the UK isn’t just a financial decision, it’s a decision that can benefit the whole community. Credit unions play a vital role in promoting financial inclusion and supporting local economies so, by choosing to join one, people can improve their own financial wellbeing while simultaneously contributing to the overall prosperity of the area in which they live.

Its this community-minded aspect of credit unions that convinces many people to become members in the first place.

Mark Fleet is CEO of Leeds Credit Union