WHAT IS A CREDIT UNION?

A credit union is a financial co-operative, which is owned and controlled by its members. Members of a credit union save in a common fund. As well as being a good savings option, with successful credit unions paying an annual dividend of up to 8%, the money saved can be used to make low interest loans to other credit union members. Only people who come within the common bond of the credit union can join it and make use of its services. The credit union is directed and controlled by a volunteer Board of Directors.

All officers of the credit union are members of the credit union, who are elected by the membership at the Annual General Meeting. All members of the credit union have one vote, regardless of how many shares they own. Credit unions are not a local or a new phenomenon. Credit unions are active in over 80 countries, and over 100 million people internationally are members. The government and many other organisations see credit unions as a valuable tool in their mission to tackle financial exclusion.

People who are concerned about the closure of bank branches and the demutualisation of building societies are also advocating the development of credit unions. The Scottish Executive supports the provision of sustainable and accessible credit unions for the people of Scotland. Credit unions make sense for many reasons and they are tipped to be the next big thing in financial services.