A £10million fund is being set up by the Scottish Government to enable more people to have access to credit and savings plans – The Credit Union Investment Fund.
What is a Credit Union?
Credit unions offer an alternative to traditional banks and building societies for saving and borrowing. They can sometimes beat the rates on the high street.Money Saving Expert
The move by the Scottish Government has been welcomed by Constituency MSP, Liam McArthur, LibDem.
“Credit unions deliver many benefits, not least by helping people to save and pay off loans in an affordable way. They can also help build resilience within communities.
“These benefits have led to a growth in credit union membership across Scotland, which now stands at over 430,000. Despite that, there seems to have been a much lower take up in rural and island areas.
“I have been a member of the Hi-Scot credit union, which originated in the Western Isles, but now offers services across the Highlands & Islands. The service Hi-Scot provides is excellent, but clearly there is considerable scope for growth, not just in Orkney but across the region.
“The new Credit Union Investment Fund and government strategy provide a perfect opportunity to look at how access to credit unions can be expanded.”
Credit unions aim to help you take control of your money by encouraging you to save what you can, and borrow only what you can afford to repay. In essence, they’re savings and loan co-operatives, where the members pool their savings to lend to one another and help to run the credit union.
This is done in a ‘not-for-profit’ way, so the cash is only used to run the services and reward the members, and NOT to pay outside shareholders, like most other financial institutions. Money Saving Expert
Scotland’s Credit Union Investment Fund will be open next Spring and will be part of a Credit Union Strategy.
Aileen Campbell, Communities Secretary in the Scottish Government said:
“Credit Unions are driven by a singular purpose: to serve their members, rather than to make profits for a select few.
“While more than 410,000 people in Scotland are already members of a credit union, we want them to become more mainstream so more people can benefit from their ethical services.
“This is particularly so for people who are unable to access mainstream financial services or have limited choices on where to go to borrow money so can feel forced to turn to high cost lenders who can exploit their vulnerable position.
“Credit unions offer saving plans as well as repayment rates that are affordable and tailored to the borrower’s income.
“By working with the sector to deliver this fund and strategy, we can enable it to develop and flourish.”